BIKE europe January/February 2015
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BUSINESS Changes at European and International operations of listed Canadian bike company
Dorel Sports Sets Out Future Course in Europe FREIBURG IM BREISGAU, Germany – At the start of 2015 Dorel Industries announced a name change for its recreational (including bikes) segment to Dorel Sports. The company also announced a strategy-change with an all-out focus on innovation, but in Europe stopped its cooperation with R&D specialist Denk Engineering. This raises questions. Jo Beckendorff
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ycling Sports Group (CSG) – ‘mother’ of Dorel Sports’ premium bicycle brands – decided to cooperate with the prestigious German bicycle R&D company Denk Engineering GmbH in 2009. This led to the foundation of the European CSG R&D center in Freiburg im Breisgau. In December 2014 CSG announced the end of its collaboration with Denk Engineering. Will this have a direct impact on Dorel Sports’ premium bike business and the closure of its European R&D center? Dorel Sports manages the entire bicycle business of listed Dorel Industries Inc including Pacific Cycle Group (targeting the mass merchant market) and Cycling Sports Group (targeting the IBD market).
Changing working profile When Denk Engineering started to work for CSG it was said that Peter Denk would act as Technical Chief Manager for the four CSG brands; Cannondale, GT, Schwinn and Mongoose. According to a Dorel press release Denk and his team were hired, “To develop innovative high-performance products.” This also brought about the creation of a European R&D center as the home of product managers, designers and engineers and was also, according to CSG, “A clear statement for Europe.” This statement still holds true as the company’s R&D for urban and e-bikes is based in Freiburg under the leadership of Markus Spenninger. Since July 2014 the former BMW and Specialized engineer manages the urban (e-)bikes projects of all CSG brands. Product managers for other categories concentrate in Freiburg on their specific platforms and are working in close cooperation with their counterparts in the US and Asia. Over the years the role of Peter Denk and his team at CSG-Germany and the European R&D center somehow changed; from Technical Chief Manager to more project-related work. And in 2014 Denk Engineering moved out of the Freiburg CSG office back into its own former office. Soon after the end of the CSG-Denk cooperation at the end of 2014 Specialized an-
‘Expanding Brand Portfolio across Channels and Geographies’ At the start of 2015 Peter Woods, President and CEO, said that the change of name for Dorel Industries recreational segment from Recreational/Leisure to Dorel Sports was, “To better represent the business as it expands the brand portfolio across channels and geographies. We have good momentum in our business as we enter 2015 and are excited about the upcoming year.”
nounced to have started cooperation with the prestigious German bicycle R&D company.
Smooth project transfer Both CSG R&D Europe and Denk Engineering assure that their cooperation ended on good terms. Peter Denk’s longtime Denk Engineering companion Thomas Fuderer says, “Otherwise we would not be able to finish the projects we are still working on with CSG.” Philipp Martin from CSG says that Cannondale’s ‘Overmountain’ product series was developed together with Denk Engineering in Freiburg and that a final project will be finished even after the official end of their cooperation. “Peter Denk and his team have done a great job. Nevertheless after the end of our cooperation there will be no structural change at CSG R&D Europe. Denk Engineering’s departure will not hinder our continued growth.” Currently the European R&D center of Cycling Sports Group in Freiburg occupies a 200 square meter workshop on the ground floor and a 200 square meter office and show room on the first floor. Philipp Martin, CSG marketing manager for Austria, Germany and Switzerland says, “When we started here we had a workforce of seven to eight people, excluding the Denk Engineering team. In the next months we will rent an additional 200 square meters. This will allow us to present workshops for dealers here.” Next to the CSG R&D center in Germany the US based bike company has its longtime European HQ in Oldenzaal, the Netherlands. Here some assembly takes place as well as warehousing and administration of CSG European operations. Marketing and technical services for the Cycling Sports Group take place from the Basel, Switzerland office. From April 1, 2015 on this branch will be renamed to CSG Customer Service Europe, but the entire European marketing division will continue its work from this office.
Extensive portfolio Currently Dorel Sports’ portfolio holds 13 bicycle and apparel & accessory brand names (see also www.dorelsports.com). They belong to two subsidiaries; Pacific Cycle Group and Cycling Sports Group. These brands are: Cannondale, Caloi, Charge, Fabric, GT, Guru, Instep, Iron Horse, Kid Trax, Mongoose, Schwinn, Sombrio and Sugoi. CSG Europe concentrates on five premium brands: Cannondale, Fabric, GT, Sombrio and Sugoi. These are distributed through the named three existing European offices. Dorel stopped the distribution of Mongoose and Schwinn bikes in Europe two years ago. There is one more CSG brand in Europe, but this one is operating independently in the UK and is named Charge Bikes. The apparel and accessory product ranges being sold under the CSG roof will be expanded. But as Philipp Martin explains, “In the very near future brands like Cannondale will concentrate on a smaller ap-
CSG Engineering Manager Markus Spenninger (left) and Senior E-Bike Product Manager Marcel Geurts at the European R&D center of Cannondale Sports Group in Freiburg, Germany, which is about to expand. Photo Jo Beckendorff
parel and accessory range as they don’t need to have seven bib shorts. Therefore the Sugoi and Sombrio product ranges will be expanded. Sugoi offers more technical-sportive bikewear
while Sombrio has more lifestyle bikewear. And Fabric will become our P&A brand with an expanded range of products like saddles, grips and handlebar tapes.”