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ANA sales fell 14% last year, but restructured company is bullish on its future

Published March 9, 2018
Company says it has signed up more than 30 new dealers since launching a new omnichannel program.

KENT, Wash. (BRAIN) — For more than a few years Accell North America has been the problem child for its parent, Dutch-based Accell Group. That status would appear to continue judging from the annual report that Accell released early Friday. While Accell Group sales were up 3.7 percent globally — up over 17 percent in Germany — in North America revenues were down 14.4 percent last year (and last year's sales were down 14 percent from the year before that). 

But ANA's executives, several of whom are brand-new to the company, tell BRAIN that they are expecting a rebound in 2018 and say ANA is actually ahead of Accell's other regional operations, and its industry competitors, in developing a viable omnichannel bike sales program. They say that program — along with new management, fast-growing e-bike sales and a variety of organizational streamlining driven by Accell's new CEO, Ton Anbeek — will help make ANA a standout within the company, and even a model for other regions.

Friday's annual report reveals some of ANA's recent woes. The loss of a Dick's Sporting Goods contract led to a 6 million euro ($7.1 million) write-down as ANA closed out bikes that were built for Dick's. That was the final blow to ANA's sporting goods sales channel, which suffered from the bankruptcy of several major retail chains in 2016. Meanwhile ANA's specialty dealer count has been in decline, and revenues took a hit when ANA left the P & A business in 2016. The restructuring efforts in the final quarter cost millions and finally, at the end of last year, ANA took a nearly $5 million punch when it discovered it had been underpaying U.S. bike import duties since 2013 (see separate story). 

All told, ANA's sales totaled 102 million euros last year, down from 119 million euros in 2016 and 138 million euros in 2015. 

In North America, Accell sells the Raleigh, Diamondback, Redline and Ghost bike brands, as well as the Raleigh Electric, iZip and Haibike e-bike brands. The company also is the largest investor in the Beeline mobile service franchise chain. 

The North American company began restructuring last fall, about the same time that Anbeek took over, replacing longtime leader Rene Takens who left the company in the spring. The ANA reorganization included the departure of several top executives and a consolidation of operations. For example, where Haibike North America was once a largely autonomous operation, based in Denver and reporting to Haibike's managers in Germany, it, as well as Raleigh Electric and iZip, are now managed by ANA and consolidated in California. Raleigh Electric's president, Larry Pizzi, is now also in charge of sales across all ANA brands, including Canada. 

John Short, who was brought on as interim CEO during the reorganization, has now joined as permanent CEO. He has led a variety of consumer brands in the U.S. and internationally, including Esprit, Joe Boxer and Sunglass Hut.

Stuart Johnson, who also has been connected to ANA since early in the reorganization last fall, was officially named chief marketing and digital officer in February, with responsibility for the omnichannel program. Johnson also has a background in consumer brands in the U.S. and internationally. 

The new executive team says the omnichannel program is being well-received by U.S. IBDs. It has signed up more than 30 new dealers since the program's announcement in January. The program allows retailers to fulfill online bike orders for an assembly fee with little or no requirement to carry bikes in their inventory. It also promises pricing parity across channels, intended to eliminate dealer objections to online discounting. A third component of the omnichannel program is the availabilty of Beeline franchises, which are being positioned as a complement to brick-and-mortar businesses, rather than a replacement. Involvement in the ominchannel program also gives retailers access to consumer data from online and mobile customers, and ANA officials say there is little overlap between stores' existing customer base and the online buyers, making the data especially useful.

Pizzi acknowledged that many store owners "bailed on" ANA after it began its online bike sales in 2016.

"Now some of the dealers are contacting me and saying, 'OK, are you really doing this? Because if you are, I want in,'" Pizzi said. "I really think it's an opportunity to get in on the ground floor." 

In its full year report released Friday, Accell predicted that in 2018 it will see "an improvement in the results in North America on the back of the omnichannel strategy and the strong growth in the e-bike market." ANA's e-bike sales grew 50 percent last year.

In a news release, Accell Group itemized areas where it sees hope for ANA to return to financial wellness in 2018:

  • "Significantly higher revenue from ANA’s direct-to-consumer (D2C) businesses and other online sales channels.
  • Growing e-bike sales for the Haibike, Raleigh and iZIP e-bike brands. 
  • Further successful integration of Beeline Mobile Bike Services, supporting increased direct-to-consumer relationships to IBD’s. 
  • Increased digital presence via robust digital marketing efforts by ANA to help dealers realize more foot traffic and retail sales.
  • Expanded offers to IBD’s to participate in new revenue streams through e-commerce fulfillment with minimal inventory carrying costs.
  • The opportunity for IBD’s to franchise Beeline Mobile Bike Services to increase the reach of their business without additional investments in brick-and-mortar locations."

Globally, Accell Group's sales totaled 1.069 million euros last year, thanks to growth in performance e-bikes, especially in Germany, Austria, Switzerland and France. Operating results were down 37.1 percent to 38 million euros, which the company blamed on the North America woes and budgeted costs for the implementation of a new group strategy 

The full year report is the first since Anbeek took over on Nov. 1. Besides the restructuring in North America, the new group strategy includes simplifying operations globally. Accell's far-flung divisions are now being corralled into 6 regional "pillars," each reporting to Accell Group's headquarters in the Netherlands. Among other things, Anbeek is working to consolidate the operation's supply chains, in part to see volume savings from suppliers. 

"Ton is looking for opportunities to take advantage of synergies," said Short. "The effort is really to consolidate the things that you would expect to see consolidated."

The company said the new global strategy will cost a total of 30-40 million euros, in addition to 7 million euros already spent in 2017. But the aim is to realize 60-80 million euros in annual savings by 2022. 

Expect more on ANA's restructuring and its omnichannel program in the April 1 issue of Bicycle Retailer and Industry News.

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Topics associated with this article: Omnichannel, Earnings/Financial Reports

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