KENT, Wash. (BRAIN) — The CEO of Accell North America says he is feeling "very good" about where the business is and he's expecting a lot of improvement in 2019.
ANA's parent, Netherlands-based Accell Group, announced Tuesday that it was no longer tracking the North American business as a core part of its business. It said it planned to re-evaluate the business in six to nine months with an eye toward selling or right-sizing it.
John Short, who was named CEO of ANA in April this year, said the announcement was necessary but that ANA is continuing to move forward on a 24-month plan to achieve break-even earnings before interest and taxes (EBIT). Those 24 months are up at the end of 2019.
Will ANA make the goal?
"We've done a huge amount of positive work at ANA that I view as foundation building," Short told BRAIN. "We have delivered a significant overall improvement from the ugly numbers that we saw in 2017. As we look at the current performance, we are most likely going to need more than those 24 months to get to EBIT break-even. As we move into 2019 we'll get closer, but it's going to be tough to get there by the end of 2019."
Tuesday's announcement, he said, "doesn't mean by any stretch of imagination that ANA is going to disappear or the brands are going to disappear. In fact I think our brands are getting a lot of attention as we move online and are getting stronger."
Short said ANA is continuing to work to rebuild a U.S. dealer base with an omnichannel program that includes enlisting brick-and-mortar retailers to assemble and fulfill online bike orders driven through ANA’s Beeline SaaS (software as a service) model. Retailers who enroll in this program receive a commission and, more importantly, a new customer. Short calls it “paid customer acquisition.”
“In the branded businesses I grew up in, we had to know the cost to acquire a new customer. Often the cost was $50, $100 or more for each new customer. Our fulfillment program is real benefit to retailers because we are delivering them a new customer and paying them for it,” he said.
ANA also offers retailers subscriptions to the Beeline software that is used to schedule service appointments and efficiently fulfill online orders. ANA acquired the Beeline mobile franchise business in April after holding a minority share in the company previously.
Since ANA went through a restructuring process last fall company officials have shared that its problems stemmed from the loss of bike sales through the sporting goods channel combined with online bike sales that often undercut dealer prices. The company spent the past year getting rid of excess inventory, refocusing its brands and product lines, cleaning up online pricing with a monitored minimum advertised price program, and developing new dealer programs.
“The foundational work done in 2018 puts us in a very good position going into 2019,” Short said.
ANA first launched a tiered omnichannel dealer program in January last year, and relaunched it at Interbike in September with the Beeline software as a service option. Short said his goal at Interbike was to sign up 100 dealers for the new program by December.
"We are just about double that now, so we are way ahead of the plan," Short said. "The plan is really a great value for dealers as everyone is starting to understand that they are going to have to deal with the online world, because that's where the customer lives. So you need to figure out how to take advantage of that if you have a bike shop.
"We want to be the linkage — that's the role we are trying to play. The moves we've made since we closed on the acquisition of Beeline in April are all intended to allow us to partner with IBDs to allow them to have access to the online world."
