Cannondale Benefits from Tour de France
MONTREAL, Canada – The performances of the Liquigas Cannondale Pro-Cycling Team during this year’s Tour de France, where Vincenzo Nibali placed third overall and Peter Sagan won three stages and the green jersey, brought benefits to Cannondale’s ‘mother’, Dorel Industries.
Dorel’s Recreational/Leisure division, home to Cannondale, Schwinn, GT, Mongoose, and Sugoi, recorded organic sales growth of 7% year-to-date, driven mostly by the IBD channel.
Awareness of Cannondale
During a conference call announcing Dorel’s second quarter results company president Martin Schwartz noted: “We are most pleased with the sponsorship of the team. It has definitely increased the awareness of Cannondale everywhere, but particularly in Europe. Dorel is committed to pro cycling and this is definitely the way to go.”
Mountain bike line-up
Schwartz also said that Cannondale would be further breaking out its Over Mountain bike line-up, with big mountain, all mountain, and cross mountain variations on the dual travel, dual suspension mountain bikes. Schwartz also mentioned a new retail research lab for the company headquarters in Bethel, Conneticut and plans for dealer pilot programs that will incorporate cues from the fashion and electronics industry into new merchandising approaches.
Adverse foreign exchange rates
Schwartz further noted: “Recreational/Leisure’s top line grew once again, though it was tempered by adverse foreign exchange rates. Profits in the quarter were flat as the negative impact of currency reduced earnings by approximately US$2.5 million.” The decline in the euro versus the US dollar negatively impacted revenues by roughly 2%. As a result the revenue increase in the quarter was only 1.1%.”
Improved sales in several bike categories
Increases came from the IBD channel, driven by improved sales in several bike categories. Lower June sales meanwhile, were attributed to attempts by mass market customers to their lower inventory levels. The company claims it continues to make progress with bringing its Sugoi apparel division back to profitability.
Dorel’s results for the first half year of 2012 saw an increase in revenue of 2.3% to US$1.25 billion from to US$1.23 billion last year with net income for the past six months increasing 9.9% to US$59.5 million compared to US$54.2 millionfor the first half of 2011. Dorel’s brands will be at Eurobike according to Schwartz, in contrast to recent announcements by Trek that decided to mount its own dealer event.