He laughs that he has the body for rugby not cycling, but Fisher Outdoor Leisure CEO Richard Allmark has embraced the bike trade with a fervour more normally associated with dyed-in-the-Lycra enthusiasts. He sprinkled this interview with words like ‘passion’, ‘exciting’, and ‘energy’.
He’s enjoying himself, freed from the constraints of running a business overseen by Gordon and Trevor Fisher.
The Fisher brothers sold their stake in the family-owned business in May 2006 – a company founded by their grandfather in 1934. It was sold in a Management Buy Out headed by Allmark and made possible through investment from ISIS Equity Partners.
Allmark had been running the business for five years prior to the MBO, but was only able to instigate a root and branch overhaul when he took full control. How did he feel when Fisher Outdoor ceased to be a family-owned business?
“It was liberating to walk in on the first day of new ownership and sit down at the desk and say this is ours now, let’s go.”
But there followed a long period of change as software and staffing reforms were started.
“It’s been a mixture of rewards and frustrations,” says Allmark. “The rewards have included seeing the new team take form and moving a long way into overhauling the business infrastructure. But everything takes so long, and that’s been frustrating. As you go through the process, it stretches resources and people’s capacity, and you drop the odd ball here and there.”
Listen to the chatter on the BikeBiz.com forum and you’d get the impression some die-hard posters don’t like the way Fisher Outdoor has become a ‘corporate’ rather than a home-spun, family-run business.
“The perception of the business has changed that’s for sure,” Allmark agrees.
“We get some critique because we’ve changed. People say we no longer care, ‘it’s not like it was before’. In some cases this critique is justified – and for that we apologise – but in many other cases people don’t take into consideration what we’re going through as a company and how that will benefit them, and us, long term.
“We’re trying to change what was a third-generation family-owned cottage business into a professional, dynamic SME [small to medium-sized enterprise], and that’s not easy.
“We can see light at the end of the tunnel now and I can’t wait to get the whole overhaul process out of the way. The overhaul has been about IT systems, about structure, about recruitment.
We’re really excited about is brand strategy and brand management, but we can’t move forward without new foundations, the new organisation can’t cope without a new structure. We’d like to go faster with the overhaul but we’d shoot ourselves in the foot if we tried to accellerate.”
In the US, it’s normal for businesses to be funded with outside private equity. Most US bicycle businesses are funded in this way. In the UK bike trade it’s still a relatively unusual funding strategy.
But Allmark believes there are many advantages to private equity investment, and his business plan is already ahead
“When you go into a relationship with a new investor you present them with a business plan,” he says. “You aim to show how you’re going to take business of x size, with x revenue, and x profitability, and take it to another level. That might be a five-year plan. Well, we’ve leapfrogged the second year with our current performance. The investors are very pleased. They are very happy with how well the new and old management teams are blending together, and how we sort out our problems.
The Fisher management has controlling equity in the company but outside equity is win-win, says Allmark.
“There are great benefits from private equity. In the UK one in three people in the private sector work for private-equity backed businesses. In the UK bike trade it’s different. But family-owned businesses on their third generation don’t always work, they either vanish or they are purchased. The purchase these days could be outside investment.
“The wonderful thing about private equity is it acts as a catalyst for modernisation and improvement. The investors encourage you to do what’s right for the business. Our staff have already seen much greater levels of investment in the business compared to its previous life.
“It’s all about being professional, getting things right first time, no cutting corners to get results. It’s a great way to work. But it’s important to understand the investors don’t run the business, they let you get on with it. You need to keep them informed of progress; it’s our job to manage.
“You mustn’t be frightened to invest in the business to move it forward. If you need large levels of capital investment
to, say, get new software, you are encouraged to do what’s right for the business. You don’t hold back the business because you got out of the wrong side of the bed that morning, you stick to the plan.”
And, in a nutshell, what is that plan?
“We want to have a level of service and business operation that is a global market leader, a pioneer even, for this industry. By mixing the passion of the people in our business with the new commercial skills, marketing and financial management, we’ll deliver something out of this world,” Allmark concludes.