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Loss of Dick's contract forces major adjustments at Accell NA

Published November 16, 2017

KENT, Wash. (BRAIN) — Accell Group is enacting a major restructuring of its North American operations after the business's sales through the sporting goods channel collapsed when it failed to win a contract to supply bikes to Dick's Sporting Goods. The loss of the Dick's contract left Accell NA with a large amount of inventory it will have to close out, at an estimated loss to the company of close to $6 million.

Senior managers at the company's North American headquarters outside Seattle have been let go, or are in the process of leaving the company. Accell Group, based in the Netherlands, has brought in a reorganization specialist as an interim leader during the transition to a new management team. 

A newly formed executive committee consisting of five managers from across the company is working with the interim leader, an American who the company is not naming publicly. The company expects to announce a new team and other changes in the next 30 to 60 days, possibly before year's end. Besides the staff changes, the reorganization will likely involve integrating some of Accell North America's divisions.

Dick's has bought bikes from Accell, primarily Diamondbacks, for about 18 years, but lost the contract this fall to Dorel's Pacific Cycle, the parent of Schwinn and Mongoose. Combined with the bankruptcies of Sports Chalet and Sports Authority last year, the Dick's loss leaves Accell NA's sporting goods distribution channel almost high and dry. Accell does continue to sell Diamondbacks to REI and EMS. REI also is the exclusive U.S. retailer for Accell's Ghost brand.

Chris Speyer, who was managing director of Accell NA, left the company in September to join REI. Steve Westover, Accell NA's vice president of marketing, left the company in November. Phil Howe, a senior vice president at the company, is expected to transition out by the end of the year.

There were also a handful of layoffs of lower level employees this fall, as well as some shifting of positions.

Accell's North American brands include Raleigh, Diamondback, Haibike, Ghost, Redline, iZip. A year ago, Accell NA spun off its Raleigh e-Bike and iZip businesses into a distinct separate division, based in California and run by Larry Pizzi. Accell's Haibike e-bike brand also has been run largely independently of the Kent headquarters, with an office in Colorado. Haibike's U.S. operations had been overseen from Europe by Susanne Puello, but she left the company in March

Pizzi is a member of the executive committee that is helping plan the reorganization.

"I will be getting involved again with the broader business," Pizzi told BRAIN on Thursday.

He said Accell NA's e-bikes sales are growing in North America, and that Diamondback and Raleigh have seen growth in online sales of bikes, with those orders fulfilled by IBDs or Beeline mobile service vans. But he said Accell has "lacked focus" on sales through IBDs in recent years. He said rebuilding the Diamondback brand for the IBD channel might be a priority after the restructuring. Building an omnichannel distribution that includes IBDs and has price parity across channels will be part of that, he said.

"In recent years the bikes have always been on sale (online) and that's been a problem for the IBDs. We are going to have to win back retailers and price parity is a key part of that."

Accell will be looking to rebuild the Diamondback brand in the IBD channel.
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