Dorel Fights Its Way Trough the Crisis

MONTEAL, Canada – The difficult economic situation doesn’t seem to bother Dorel Industries Inc. owner of among them Cannondale, GT, Pacific Cycle, Mongoose and Sugoi.

In the first quarter of this year, the division Recreational/Leisure, including all the bike brands, reported a 14.9% growth in turnover to € 161,4 million while the earnings from operations decreased 32.6%.

The organic revenue experienced a decline, but was concentrated at mass merchant customers which were slower to replenish their inventory levels in bikes as compared to the other segments.

Sales through the IBD channel of the brands Cannondale, GT as well as some Schwinn und Mongoose bike experienced organic growth of 8%. Sales of the apparel brand and Sugoi went up by 9%.

Cost-cutting

An important in the division Recreational/Leisure is the 170 basis points decrease due principally to a less profitable product mix as the mass merchant consumers shifted to lower price point products. The expenses increased considerably as the segment continued to invest in its infrastructure and in product innovation, however given the environment Dorel states to be keenly aware of the importance of cutting costs wherever possible and is actively reducing spending as needed.

As part of that program, last month, Dorel announced the outsourcing of Cannondale’s frame production and the consolidation of all North American product development, marketing and business management for the Cannondale, Schwinn, GT and Mongoose brands sold to the IBD channel is being consolidated at Bethel. The centre for the development of bicycles for the mass market remains in Madison, Wisconsin.