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Hess: Electra to grow international sales under Trek

Published January 6, 2014
Skip Hess with Electra's Townie Go e-bike

VISTA, CA (BRAIN) — Skip Hess spent most of Monday meeting individually with the 35 employees at Electra answering their questions and concerns about the sale of this iconic brand to Trek.

And there were just as many questions popping up among Electra dealers—900 in the U.S. and 110 in Canada—about the company’s new relationship with the industry’s biggest brand.

“All of our Electra dealers who are currently carrying Electra have the ability to continue with us regardless of what other bicycle brands they carry. They are part of what got us here and we want them to feel they are very special in this move,” Hess said.

Overall, the company’s in-house reps will continue to service Electra-only dealers while Trek dealers who carry Electra will work primarily through Trek’s territory managers, Hess said.

As for Electra’s current employees in Vista, Hess said it was too early to discuss integration of staff operations within Trek, but it is something that will be looked at.

“It’s a little early yet, but you want to exercise synergies when two businesses come together. It is something that has to be managed for the benefit of both companies. But I don’t think this will have a significant impact on our employee base,” Hess said.

“Trek has some backroom strengths that we need some help with, and there are some things that Electra does that will remain with us,” he added. For example, Hess has pushed hard to build a merchandising system for Electra accessories—that will remain in Vista under Electra management, he said.

But the major play for the two companies, and what helped drive the acquisition, is the opportunity for Electra to expand its global sales. Currently, Electra has 17 employees at its wholly owned subsidiary in Hamburg, Germany. The Hamburg operation primarily services the Netherlands, Belgium, Austria and the Scandinavian countries. Electra has no sales structure in Asia or South America.

“One of the bigger dynamics of this acquisition is that Trek has significant strength in global distribution, not only domestic which we know they are unequaled at, but their ability with sales subsidiaries all over the world, plus international distribution, with supply chains, with communications, with training and education.

“It means that the Electra brand is going to be broadly available now to an entire group of people all over the world, and we have a bike for every single one of them who haven’t had access to them,” Hess said. “The international business is a huge upside and an opportunity in our relationship.”

Hess joined Electra’s board of directors in 2008 and a year later became co-CEO. He eventually took over the helm as CEO to oversee all aspects of the business as company founders Benno Baenziger and Jeano Erforth, who launched Electra in 1993, stepped down from operational roles.

Electra is a portfolio company of Caltius Equity Partners, a Los Angeles, California-based private equity firm that invested in the brand in 2007.

 

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