Derby Faces Tough Times: CEO Matthews is out

STAMFORD, USA (10 January) - Derby Cycle Corporation President and CEO Gary Matthews is out. Matthews reached a so-called "separation agreement" with Derby. No details were given about the amount Matthews will receive from Derby. Nevertheless, Mark Todd, former MD at Raleigh Industries in the UK, suggests, "the man who caused the Sturmey-Archer staff plight is likely to walk away with a payoff of over $500,000!". Not only him but several former and current employees of Derby Cycle share Todd's opinion. Matthew's exit has also led to the closing down of the Derby Cycle Corporation's headquarter in his home town of Stamford CT which will also lead to about 30 people losing their jobs. The corporate headquarters will be relocated to the channel island Guernsey UK. This decision was made by industry veteran and executive chairman Alan Finden-Crofts who in December was appointed the new Executive Chairman for Derby Cycle Corp. He is one of the former owners of Derby and still a major shareholder. He was asked to come back and "concentrate on operations and develop a turnaround plan focused on profitability and cash management." There are also strong rumors that Derby Cycle has to sell its successful Gazelle business in the Netherlands and perhaps the top unit producing factories of Derby Germany. Otherwise the entire debt ridden group will not be able to come back on track. According to sources in the Netherlands a management buyout at Gazelle is possible and 'likely'. Furthermore it's rumored that Finden-Crofts will trim the entire top management of each subsidiary. Several managers are close to leaving the group's companies. Nevertheless several actions have to be done and very quickly. Former MD at Raleigh, Mark Todd stated, "my fear is that time is not on Derby's side and that a breakup of the company is inevitable particularly with financiers like George Soros involved." Derby recently accepted a US$ 7.5 million loan from Soros Private Equity Partners at an interest rate of 30 percent!(JB)