Industry players restructuring for better financial foothold

The fact that a major player like Accell Group has been struggling under a burden of heavy debts gives a clear indication of the difficulties in the market. The manufacturer saw its turnover decline 10% from €1.43 billion in 2022 to €1.3 billion in 2023. At the same time, the industry has witnessed a flurry of insolvencies including Austrian bicycle manufacturer WSF, German LEV maker Onomotion and Austrian bike brand Simplon. On the flip side, other key players are continuing to invest, or in some cases disinvest, to secure their financial health heading into the next year. For some, “survive to 25” could be a very real challenge.

In early October Accell Group reached an agreement with a majority of its financial stakeholders to improve its financial position. The Dutch manufacturer has continued to see profits drop and debts rise so a financial restructuring was a necessity. The transaction will lead to a reduction of Accell Group's debt by approximately €600 million.

‘A strengthened liquidity position’

“The transaction announced provides for additional cash funding to the business of approximately €235 million. The maturity of the group’s recapitalised debt is extended to 2030. This provides us with a sustainable financial structure, a strengthened liquidity position and an ability to invest in the future,” Accell Group CEO Tjeerd Jegen wrote in a statement. “Implementation of the recapitalisation is expected by early Q1 2025. Current shareholders KKR and Teslin retain a significant majority controlling stake in the company.”

Accell Group inventory level back to normal

In the past 12 months the Group's bicycles, parts and cargobikes activities have been further integrated, benefiting from joint stock management and one integrated platform. The company reports that its manufacturing footprint has been optimised through the transfer of production and specialisation of factories, including the closure of production locations in the Netherlands and Germany. Also a stringent savings programme was started. At the same time, Accell continues to decrease stock levels and expects the bike inventory to be back to normalised levels by the end of the year. The inventory of parts and accessories is already back at normalised levels, the company states.

Giant Group acquires Stages Cycling

Taiwan's Giant Group has acquired Stages Cycling from its owner companies, some of which filed for Chapter 11 bankruptcy protection in June. Giant Group's US subsidiary, SPIA Cycling Inc. finally got hold of Stages Cycling with a winning bid of US$20.1 million (€18 million). “The main purpose of the acquisition is to expand our business footprint in the indoor cycling field and build a complete cycling ecosystem,” wrote Giant regarding the takeover. Giant already held a minority share in Stages Cycling and failed to take-over the company earlier in 2023. SPIA Cycling Inc. has now acquired key Stages Cycling assets, including intellectual property, manufacturing facilities, product lines, and limited inventory. Giant hopes to integrate the strengths of both parties and provide consumers with a more comprehensive experience.

Merida takes over German distributor

Merida has enlarged its majority ownership in its German distributor Merida & Centurion Germany GmbH (MCG), which is managed and owned by German industry veteran Wolfgang Renner. According to stock exchange information from Taiwan, Merida paid €17.27 million to acquire another 39% of MCG’s shares from managing director and shareholder Wolfgang Renner. Merida now holds 90% of all shares in MCG. In addition to the brand Merida, the Magstadt-based company also manages the brand Centurion whose trademark rights Wolfgang Renner acquired in 1990. The company are also in the market with their wholesale business MCG Parts as well as their own e-bike assembly facility based in Germany. The R&D team for both Merida and Centurion, as well as the racing team management also operate out of Magstadt.

Pon financially secure with new factory and investments

In September, Pon celebrated the opening of its new state-of-the-art bicycle and e-bike factory in Lithuania. The Ministry of Economy and Innovation granted the status of this €57 million project into a major foreign direct investment which turned the opening into a high-brow event. The ‘Pon.Bike’ bicycle factory is one of the largest investments in the Kėdainiai Special Economic Zone. It will assemble mainly e-bikes of various Pon.Bike brands and has a capacity of 450,000 units annually. According to the Ministry of Economy and Innovation the export of bicycles represents approximately 1.5%. of all Lithuanian exports in 2023. Besides Pon.Bike also Baltik Vairas and LitBike operate bicycle factories in the country.

‘The Kėdainiai factory will assemble mainly e-bikes of various Pon.Bike brands and has a capacity of 450,000 units annually.’

Closer to home, Pon has invested in Ziemi to support the venture of its innovative bicycle lighting system into international markets. Pon.Bike is, among others, the largest of seven parties that recently participated in an investment round raising €300,000. Currently available as an aftermarket product, it is still too early to enter the OEM market, although through the close connection with Pon.Bike the small company is gaining valuable market knowledge.