Raleigh UK Cuts 40-50 Head Office Jobs

NOTTINGHAM, UK (June 11) - Raleigh UK is about to layoff 40-50 employees at its head office. Raleigh stated in a recent press release "It has become essential that we act now to reduce our fixed cost overheads by reducing staff numbers." Raleigh states that due to very poor weather conditions last year, industry figures indicate that the UK retail market actually declined in 2000, after a period of relative stability. Furthermore, the start of 2001 has been depressing - foot and mouth disease has seriously affected cycle industry sales, with average market volumes down by 17%, even against last year. "Additionally the market for bicycles has, year by year, become more competitive and retail prices have, in real terms, fallen considerably, while consumer expectations of performance have increased," Raleigh continues. "All of this requires us to be progressively more cost effective in how we manage our business, as well as faster to anticipate - and react to - changing market needs. Nevertheless, the business is still hampered by its fixed cost of overheads. Not only are our costs too high, but the consequential inefficiency of having too many people involved in all our business processes is that we become slow in decision making and late in action. It has become essential that we act now to reduce our fixed cost overheads by reducing our staff numbers. There is no alternative but to cut our Head Office structure by some 40-50 positions." Raleigh will cut the 40 to 50 jobs in July. The organizational changes connected with the lay offs comes after other changes at the renowned British maker. New Sales and Marketing personnel stepped in as well as a new management to head Raleigh's product and sourcing team. The Raleigh press release comes on the heals of a confirmed buy out bid from a group of investors lead by Mr. Alan Finden-Crofts, who is currently the companies' Executive Chairman and Director, for the Derby Cycle Corporation. The company is at this moment considering and evaluating this bid. According to a report in the UK Sunday Times of June 3, the group lead by Mr. Alan Finden-Crofts has made a GBP 50 million (US$70.6mn; EUR82.7mn) bid to buy the company from the American Owners, Thayer Capital Partners and Perseus Capital. GBP 17 million (US$24mn; EUR28.1mn) of the total amount will be put forward by Finden-Crofts himself. The group wants to purchase Raleigh Industries (UK and Ireland), Derby Cycle Werke in Germany, Raleigh Canada, USA and South Africa. It is expected that Dutch operation Gazelle will be sold separately for circa GBP 100 million (US$141.3mn; Eur165.2mn). That this scenario is becoming more likely, is confirmed by Gazelle's MD Klaas Dantuma. He expects to make an announcement about a take-over within weeks.(BT/JO)