The rubber met the road in March when the owner of elite Cannondale bicycles moved to up production in Fairfield to include other brands.
New hires are expected, though no numbers were announced.
In a revelation not surprising to bike industry insiders, Montreal-based Dorel Industries Inc. announced an expansion of its Cannondale subsidiary in Bethel, which will now take over development and marketing of other noted Dorel bike brands like Schwinn, Mongoose and GT.
Connecticut and Massachusetts have a significant cluster of high-tech bike makers, including Topolino Technology, a Bethel-based designer of hybrid carbon-Kevlar wheels that was tabbed as the state”™s high-tech company of the month in March by the Connecticut Technology Council.
Connecticut is also home to Chester-based Richard Sachs Cycles whose namesake founder was deemed by judges to have produced the best bike frames for road and track use at the inaugural North American Handmade Bicycle Show in 2005.
Bethel steered clear of a potential pothole in getting picked as the company”™s expansion site ”“ Dorel is paring 200 jobs from a manufacturing facility in Bedford, Pa., shifting production to Taichung, Taiwan.
Both moves are part of a new worldwide “centers of excellence” program in Dorel”™s lexicon. The company did not immediately state how many jobs it will add in Bethel. Madison, Wis., will remain the main office for Dorel”™s Pacific Cycle brand of bikes predominantly sold in chain retailers, and Vancouver, British Columbia, will be its primary site for apparel development and sales. Internationally, Dorel is basing its European marketing in Basel, Switzerland, while Taichung will steer Asian operations.
Dorel acquired Cannondale for about $200 million in February 2008, purchasing the company from Greenwich-based Pegasus Capital Advisors, which had invested in Cannondale as the company underwent a bankruptcy reorganization in 2003.
Pegasus shed an unprofitable motor sports division and added Sugoi Apparel as an add-on acquisition, increasing Cannondale sales 30 percent to $200 million. In 2007, NBA star LeBron James became a minority investor on the eve of the company”™s sale to Dorel.
This month, Buyouts Magazine lauded the Cannondale recovery and sale to Dorel as the “turnaround of the year.”
“We were not deterred by the difficulties that Cannondale was facing,” said Pegasus founder Craig Cogut, in a written statement.
“We saw the company’s inherent value ”“ its brand, its outstanding products and its full potential ”“ and we were confident that we could return Cannondale to preeminence.”
Cannondale and Pacific Cycle are led today by Robert Baird Jr., a Greenwich resident who also sits on Dorel”™s board. Under Baird, Dorel sales of bikes, accessories and apparel totaled $154 million in the fourth quarter and $644 million for the year, of about $2.2 billion in companywide sales.
In addition to bicycles, Dorel sells infant and toddler accessories under the Cosco and Safety 1st brands, and ready-to-assemble furniture like office files and apartment futons.
Like most companies, Dorel is grappling with an uncertain economy even as it restructures its business for the next business cycle.
“What we”™re seeing is fairly steady business ”¦ but we all have our concerns going forward,” said Martin Schwartz, CEO of Dorel, in a March conference call with investors. “Are we going to sell as many expensive road bikes as we did in the previous year? I mean, that”™s just (a natural question) given this environment ”¦ We haven”™t really seen those numbers drop off yet but we haven”™t really hit the bicycle season yet.”
