MONTREAL (BRAIN) Thursday May 24 2012 10:40 AM MT—Dorel Industries’ chief executive Martin Schwartz told company shareholders Thursday morning that he expect Dorel’s fast growing bike business to keep moving ahead at the same pace this year.
Dorel’s recreational/leisure segment, which includes Cannondale, GT, Pacific Cycle, Mongoose, Schwinn and Sugoi, posted a record first quarter in 2012, coming off a record 2011.
“A fair question that’s been asked is can this momentum be sustained? My answer is definitely yes,” Schwartz said, speaking to a room full of shareholders gathered at Montreal’s Omni Hotel. “Just one reason is the growing funding for bicycle projects in cities around the world. Right here in Montreal the city will spend $10 million this year and next to improve its cycling infrastructure. Billions more are being dedicated to cycling in cities around the world.”
Schwartz highlighted the Cannondale SuperSix Evo, GT Zaskar 100 and Schwinn Del Mar as successes in the bike division, attributing their success to product innovation, brand building and a growing global distribution network.
Much of the key bike brands’ success has been outside of North America, a trend Schwartz also sees continuing as Dorel pushes into Asia.
“Sales of Cannondale and GT have grown steadily in Europe and Japan. Most of the Cycling Sports Group’s growth, our premium brands, was outside North America last year and comprised over 50 percent of the revenue. Overall Cannondale dealers are selling more of our bikes than ever before. This summer CSG will begin selling Cannondale and GT in China in the premium segment of the Chinese bicycle market through our Asian divisions. The market there is extensive.”
Schwinn profited from a strategic marketing spend last year and made modest gains despite an uncertain environment in the mass market. Sugoi is also moving in the right direction following a restructuring after several unprofitable quarters, Schwartz said.
Dorel’s recreational/leisure segment, which also includes PTI, Iron Horse and ownership of several global distributors and their brands, grew 10 percent in the first quarter with revenue of $220.9 million. It makes up more than one-third of Dorel’s overall business, which also includes home furnishing and juvenile divisions. Dorel, a $2.4 billion compaby, celebrates is 50th year in 2012.