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Power to the people: Accell buy applauded

Published December 22, 2011

CHATSWORTH, CA (BRAIN)—Those who have been patiently plugging away at e-bike sales in the U.S. hope Dutch juggernaut Accell Group’s entry into the market will be the shot in the arm the industry needs to jumpstart the sluggish category.

“They were the company that developed the market in Western Europe. They did the blocking and tackling to market electric bikes to dealers and consumers so they have a pretty good understanding what it takes to get it off of dead center,” said Larry Pizzi, president of Currie Technologies, which Accell Group acquired from its private equity owner in a deal announced this week.

Accell Group—a 577 million euro company with a portfolio of premium e-bike brands including Sparta, Batavus, Koga, Winora and Hercules—is credited with opening Dutch retailers’ eyes to the higher margin potential of e-bikes around 2004. Instead of making 40 to 50 euros on a bike sale, they could pull in hundreds for the high-ticket purchases. Word spread and sales soared. Last year, 171,000 e-bikes sold in the Netherlands, second to Germany’s 200,000. In the entire 27-country European Union, an estimated 588,000 e-bikes motored out of bike shops.

“That was an awakening and when the awakening happened, the Europeans’ reacted very quickly,” said noted e-bike consultant Ed Benjamin. “I keep waiting to see if that awakening will happen in the U.S.”

Rough estimates put the U.S. market size at about 50,000 units although Benjamin said there’s no solid data to back that up, and many retailers in this passion-based industry still balk at selling and servicing battery-powered bikes. Benjamin heralded Accell’s acquisition of Currie as a potential boon to the U.S. e-bike market.

Where Currie comes in

The question is: will the strategies that worked so successfully for Accell Group in bike friendly Europe translate to consumers entrenched in U.S. car culture?

That’s where Currie comes in, Pizzi noted.

“It’s a different market. It’s a different consumer. Consumers aren’t as transportation oriented as they are in the Netherlands,” he said. “I think that’s why they acquired Currie Technologies. For the past 12 years we’ve been working on developing the market in the U.S. with a product range that’s tailored to the U.S. consumer.”

Currie, the largest e-bike supplier in the U.S. in terms of units, will report $20 million in revenue this year through sales of its e-scooters and iZip electric bikes. Although a bulk of its revenue comes from scooters and opening pricepoint e-bikes sold in the mass-market channel, the largest area of growth has been in specialty shops. This year, Currie opened 75 new IBDs in the U.S. that hadn’t previously carried electric bikes, Pizzi said.

“That’s where we see the future. Certainly to sell $2,000 and $3,000 electric bikes, you can’t do that in the mass market,” he added.

Pizzi expects Currie will benefit from Accell Group’s vast resources including more marketing dollars, its technology and development center in Western Europe and production capabilities in Asia.

With the acquisition, Pizzi will stay on board as will the rest of the 40 employees at the Southern California-based Currie Technologies. There are no immediate plans to integrate Currie with distributor Seattle Bike Supply, which is also owned by Accell Group.

—Nicole Formosa
nformosa@bicycleretailer.com

Topics associated with this article: Mergers/Acquisitions

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