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ASI Closes Purchase of European Subsidiary

Published February 3, 2011

MUTLANGEN, Germany (BRAIN)—Advanced Sports Inc. has completed the acquisition of its former German sales agent, Twin Sport, giving the company full ownership over its European subsidiary.

ASI purchased 50 percent of Twin Sport from its owner Armin van Hoogstraten two years ago, and the remaining half of the deal closed on January 1. During that time, it renamed the business ASI Europe, and started direct distribution in Germany, France and the Netherlands under Van Hoogstraten’s management.

Currently, the parent company of Fuji, Breezer, Kestrel, SE and Oval Concepts, sells all its brands in Germany; Kestrel and Fuji in France; and Fuji only in the Netherlands.

Investing in its own subsidiary was necessary to support ASI’s long-term growth plans in Europe, and to support its investment in a pro tour team, said Pat Cunnane, president of ASI.

The primary focus for growth moving forward is in the important German market, where ASI’s brands have historically had little presence.

“Our objective in Germany is to grow the brand and our brands so that we can have 10 percent market share. If things go well, that’s a 10-year plan,” Cunnane said. He realizes that will be a difficult task given stiff competition from several dozen brands, but he hopes strong distribution will play a key role in making headway.

“The German brands alone are hugely successful. I don’t want to sound or act overconfident that it’s going to be easy to grow. It’s not enough to have good product and a pro tour team. You have to have direct, easy distribution of the product so customers can buy with the same terms they get from larger suppliers,” he said.

One added benefit is that many of ASI’s bikes come 99 percent assembled from its Poland factory.

Van Hoogstraten estimates ASI currently holds less than 1 percent market share in Germany.

“I think at the moment, it’s the hardest market in Europe. It’s also the most diverse market. 2.2 million bikes are IBD and there’s not even one company selling 120,000 bikes per year through the IBD. Nobody has more than 4 or 5 percent market share. The market is much more split up between brands,” van Hoogstraten said.

And it’s a market that’s seen little or no growth in the past five years.

“We have to take market share from others if we want to grow,” he added.

But if ASI can gain strength in Germany, Cunnane believes success there will boost the company’s independent distributors in the rest of Europe, much like how its position in the U.S. has directly influenced Canada and Mexico.

—Nicole Formosa
nformosa@bicycleretailer.com

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