Accell Group Stops Raleigh Production in Canada
HEERENVEEN, The Netherlands – Today Accell Group NV announced that its subsidiary Raleigh Canada Ltd. will cease the bicycle manufacturing and assembly activity of its Waterloo, Québec facility in 2013. The facility will continue to support Raleigh Canada’s presence in the Canadian market as a distribution and service fulfillment center.
Raleigh Canada was the largest bicycle manufacturer in North America. In 2007 the facility produced 320,00 units which were sold to through stores such as Canadian Tire Corp, Wal-Mart, Zellers, and a variety of sporting goods chains as well as at IBDs. In 2010 Raleigh Canada made an agreement with Wal-Mart to be their main supplier of both Raleigh and Triumph branded bikes. This agreement meant that Raleigh would have more production in their Waterloo factory with the consequent increase in production workers.
Raleigh senior manager
Farid Vaya, has been managing Raleigh Canada Ltd. for years and years. But like other old time Raleigh senior managers he retired when Accell Group took over Raleigh last year. Canada is a bike market of between one and 1.3 million units which are for about 75% distributed through retail giants like Tire Corp and Wal-Mart. The remaining 25% of the market is served through about 2,000 IBDs that next to bikes in summer also sell wintersport equipment and snowscooters.
Manufacturing no longer economically viable
The today issued Accell Group press release says that: “Continuation of manufacturing and assembly activity in Waterloo is no longer economically viable. This season 135,000 bicycles will be assembled. For 2014 and beyond, Raleigh Canada will be working with selected offshore suppliers predominantly from Asia to serve its Canadian distribution network.
“The manufacturing and assembly activities in Waterloo take place on a seasonal basis. As a result of the termination of these activities, contracts of approximately 100 employees will cease at the end of the seasonal production cycle in June 2013”, says Accell in its statement.
€ 1.5 million reorganization costs
Accell Group reported further that the reorganization costs will amount to approximately € 1.5 million, predominantly for impairment costs of assets and redundancy costs. The reorganization will contribute positively to Accell Group’s results as from 2014.