The Accell Group - owner of both Lapierre and Raleigh - is expected to make approximately 150 job cuts as it looks to ‘streamline’ production across Europe.
This comes just a month after Cycling Weekly reported that the group behind the two brands was said to have “unsustainable” finances, and at a time where insiders say the industry is at the most turbulent it's been in 30 years.
According to a report from Bike Europe, the Accell Group has announced that it will merge two facilities in the Netherlands and relocate other production streams to its other European manufacturing sites. The 150 cuts are expected to come as a result of this production reshuffle.
In December top credit ratings firm Fitch lowered Accell’s long-term default rating to CCC from B-, meaning the business is deemed to be at “substantial credit risk”. Job losses at Raleigh in the UK soon followed and a production site in Germany was shut down.
Netherlands-based Accell Group describes itself as the European market leader in e-bikes, with its portfolio counting brands such as Lapierre, Raleigh, Haibike and Koga.
A spokesperson from Accell Group previously told Cycling Weekly that the group has “sufficient liquidity” thanks to €250million (£216.5million) in funding from its parent company, KKR.
“The market circumstances will gradually improve, and we have a long debt maturity profile,” the Accell Group spokesperson said. “The liquidity injection significantly strengthens the company and boosts our confidence that we will come out on a stronger footing. The long-term outlook for the business is favourable.
“While the short-term bike market has remained volatile in recent months, the mid-term bike market fundamentals are expected to remain strong, with significant growth opportunities for scaled players, like Accell Group, and a continued acceleration towards high-end e-bikes.”
Accell CEO Tjeerd Jegen, who took over in October, said that he believes the upcoming round of cuts are a necessary part of boosting the efficiency of the group moving forward.
He said: “Unfortunately, the relocation of production cannot take place without certain positions being eliminated, and we realise that this will have a significant impact on the affected individuals.
“We will do our utmost to inform and support everyone as effectively as possible. We are convinced that these actions are necessary to improve our competitive position and ensure sustainable long-term growth."
According to Bike Europe, nearly half of the 320 permanent employees based at the Accell Group’s site in Heerenveen, the Netherlands are the members of staff who are most likely to be at risk as part of this process. It’s reported that Accell Group is “closely collaborating” with unions to ensure clarity for all impacted employees.
Last November, Accell Group said it was scaling back operations at Raleigh’s Nottingham based headquarters. Lapierre also ended its long standing relationship with WorldTour team Groupama-FDJ.
Several brands have posted losses in the past few years, with the most high profile casualty being WiggleCRC, which entered administration in October last year and is currently seeking a buyer.
