August 08, 2016 – Dorel Industries Inc, a Montreal-based conglomerate that makes bicycles, home furnishings, and juvenile products, announced during a conference call to investors on Thursday that its sports segment had lower than expected results in the second quarter (Q2). Faced with quarterly revenues of only $236,514,000 USD for Q2 in 2016 versus $251,087,000 USD for Q2 in 2015 – a 5.8% reduction – the company announced that it has already begun restructuring.
“Dorel Sports is taking the necessary steps to maintain its strong position in the face of a continuing tough market,” commented Martin Schwartz, Dorel’s president and CEO. “Results have been affected by sustained discounting in North America and the reality of depressed foreign exchange rates, as IBD sales outside the U.S. are significant. Nonetheless, we remain confident and excited about our bicycle business.”
Among restructuring measures that affect the North American market, Dorel Sports will be exiting its three U.S. “Cannondale Sports” named retail outlets. Dorel will also be relocating Pacific Cycle’s mass market and distribution operations from Illinois to Savannah, Georgia to take advantage of recently-vacated facilities there belonging to another segment of Dorel. Overall, these restructuring measures are expected to produce a 4 percent reduction in Dorel Sports’ global workforce, saving the segment some $5 million USD annually.
Dorel is the owner of such bike brands as Schwinn, GT, Mongoose, Caloi, IronHorse and Cannondale sold to independent bike dealers (IBDs). Dorel also has its Pacific Cycle division, which works with the mass merchant and sporting goods channel, selling to large box stores. Collectively, this makes Dorel one of the world’s top bike manufacturers. Also grouped under Dorel’s Recreational/Leisure segment are the Sugoi, Cannondale, GT, Schwinn, IronHorse, and Mongoose apparel lines.
In mid 2013, Dorel opened a 4,100 sq foot concept store near Roosevelt Field on Long Island, NY, claiming the area was not well served by IBDs carrying its products. Two other concept stores were subsequently opened in Massachusetts.
The juvenile products segment also reported lower quarterly revenues while home furnishings reported an increase. Overall, company revenues were down 4.8 percent from Q2 2015. Dorel is traded on the Toronto Stock Exchange (TSX: DII.A, DII.B).
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