19/12/2013

Business poeple : Dorel Bids Adieu to Bicycle Chief Baird

Dorel Industries Inc. announced the departure of Robert P. Baird, group president and CEO of the company's Recreational/Leisure segment, which includes Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and Sugoi. Peter Woods, the segment's CFO, has been named interim president until a new president is named. Both changes are effective immediately.

"We are now initiating a search for Bob's successor. We thank Bob for his service with Dorel and wish him well in the future," stated Martin Schwartz, Dorel president and CEO.

"Our recreational business has become a billion dollar operation. We have an excellent team in place throughout the organization as well as brands that are highly respected by both dealers and consumers,"   concluded Schwartz.

Baird joined Dorel in 2005 as a member of the company’s board of Directors. In 2008, he was put in charge of the Recreational/Leisure segment. Previously, Baird had served in senior executive positions in the U.S. at Philips Electronics. He also has extensive experience in the consumer goods Industry across multiple companies including Samsonite, Scott Paper, Bristol Myers and Procter & Gamble.

Dorel's branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in its Juvenile segment, as well as Cannondale, Schwinn, GT, Mongoose, Caloi, IronHorse and Sugoi in Recreational/Leisure.  Dorel's Home Furnishings segment markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel has annual sales of US$2.6 billion and employs 6,300 people in facilities located in twenty-four countries worldwide.

The Recreational/Leisure segment outperformed Dorel’s other two segments – ready-to-assemble furniture and juvenile products – from 2008 through 2012, when Cannondale’s gains in the much larger European market helped push revenues to $928 million, or 37 percent of Dorel’s revenues. Signs of prosperity came in late 2012, when Dorel announced that the segment would move its headquarters from Bethel to Wilton, CT and that Cannondale would sponsor its own pro cycling team beginning in 2013 - a commitment judged to be in the $10 million range.

But the segment’s holdings are broad and complex and sometimes confusing. Its Pacific Cycle Group (PCG) sells Schwinn and Mongoose bicycles to mass merchants like Walmart Stores Inc. and Costco Wholesale Corp. and Roadmaster, Iron Horse to sporting goods chains. PCG also sells Schwinn and InStep jogging strollers, bicycle trailers, and motorized scooters.

Cycling Sports Group (CSG), meanwhile, focuses on selling Cannondale and GT bikes to independent bicycle dealers, or IBDs, while its Apparel Footwear Group (AFG) makes Cannondale products under the Cannondale and Sugoi brands. While Dorel still refers to the combined business as its Recreational/Leisure segment for financial reporting purposes, press releases issued from Connecticut have referred to it as “Cannondale Sports Unlimited” since late 2012.

In any case, the three businesses are supported by a sourcing office in Taiwan and sales and distribution companies in Australia, Japan and China. Dorel Recreational/Leisure even owns and operates 70 retail stores in Chile and Peru and in early 2013 announced that CSG had acquired a controlling stake in Brazil’s largest bicycle manufacturer and retailer - Calois.

But Dorel Recreational/Leisure’s fortunes, and that of much of the global cycling industry, turned this year when an unseasonably cold and wet spring in North America and Europe slowed sales of new bikes.  In November, Dorel reported sales for the first nine months of 2013 had declined by 4.0 percent, or by $28.5 million, as mass merchants delayed deliveries of holiday inventory until October and IBDs continued to work through inventory left over from spring.

The company said it expected IBDs to postpone orders for its Spring 2014 models until next year, indicating that segment sales will likely decline for the first time since the end of the Great Recession.

By press release

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