REVISED: Schwinn/GT gets Euro hub

Nothing gets past BikeBiz readers. According to Shaun, a regular contributor to our bulletin board, a To Let sign recently went up on the Schwinn/GT UK Sales warehouse at Aztec West Business Park in Bristol. More changes ahead, he wondered?
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Yes. And some pretty radical ones too.

Schwinn/GT International Bicycle Division is in the fourth and final stage of its transformation, Trevor Bell, the senior vice president and MD, told BikeBiz on Good Friday.

Stage one was management changes early in 1999. Stage two was the appointment of Trevor Bell with a brief to rationalise the European business. Stage three was a name change (Caratti became Schwinn/GT UK Ltd.). Stage four is a radical overhaul of the company in order to better serve the customer, said Bell.

This final stage comprises of combining the Schwinn Cycling and GT Bicycle/Riteway Products distributors in the UK, Germany and France into two European operations, GT Europe and Schwinn Cycling Europe. Purchasing and product development will be on a pan-European basis although the UK, Franch and German subsidiaries of Schwinn/GT will handle their own sales and marketing. A central distribution hub service has been outsourced to Irish fulfillment company IEC.

This European hub is just 60 kms from Calais, jokes Bell. Its in Dartford, Kent.

Dell computers use IEC for their fulfillment needs as do other big name companies.

Bell stresses the UK angle:

The transition to IEC will be seamless. We wanted the best of both worlds. We didnt want a centralised pan-European hub which handled everything we wanted the subsidiary companies in the UK, France and Germany to control their own sales and marketing but to have the benefit of a central distribution point. A UK IBD will be able to call the Schwinn/GT local office and get a friendly voice, somebody who knows their business rather than send all calls through a pan-European call centre for everything.

The Aztec West warehouse-cum-office HQ is to be closed down with a reduced workforce moving five miles away to a smaller office near Parkway railway station in Bristol.

Warehousing jobs are lost in Bristol but are created in the GT/Schwinn operations on the continent. The number of job losses is not yet known because redundancy packages are still being negotiated, however the UK company will be significantly smaller said Bell.

Bell wont be working from Bristol. He and Arthur Cook, the current MD of Schwinn/GT UK Ltd MD (formerly the finance director at Saracen), and operations director Scott Johnson, will be working from a new European HQ in Newbury, Bucks. These three are joined by a new recruit, Mark Perryman, who becomes the new commercial director. (See press release below for more European staff changes).

Perryman, 38, started work last week. His last job was with Perseco, who handle all the European instore promotions for the McDonalds burger chain.

To answer those critics who point out that Schwinn/GT UK, neé Caratti, has been through more destabilising restructuring than most companies, Bell agrees. The company has been in almost constant flux for two years, he said. But once the fourth stage of the transformation is complete by July the company will be able to settle down and concentrate on better serving its corporate and IBD customers:

You know the saying if it aint broke, dont fix it? Well, the corollary is if it is broke, fix it.

Caratti was not a very good functioning operation. It wasnt very good at servicing customers properly. The changes going on now will result in a stronger, more efficient operation. This is then the future shape going forward.

FULL TEXT OF THE SCHWINN/GT PRESS RELEASE:


SCHWINN/GT CORP ADOPTS UNIFIED EUROPEAN STRUCTURE

TO SUPPORT GLOBAL GROWTH STRATEGY

ANNOUNCES KEY MANAGEMENT APPOINTMENTS

BRISTOL, UK, 18 April 2000 - Schwinn/GT Corp

announced yesterday that it is reorganizing its current parallel

Schwinn Cycling and GT Bicycle / Riteway Products operations in France,

Germany and the United Kingdom, and its distributor sales functions

currently located in the United States into a single European

organization. The company also announced it is partnering with IEC, one

of Europe's leading supply chain companies, to expand and significantly

enhance its logistics and distribution services to its customer base

throughout Europe.

Trevor D. Bell, SVP & Managing Director for Schwinn/GT's International

Bicycle Division, said, "Bringing together all the various parts of our

organization that touch our customer base into a single, focused

business unit reflects our increased emphasis on Europe and our

expectations for aggressive growth by both our

Schwinn and GT brands in this important cycling market. Concurrently, we must become

the acknowledged customer service leader in our industry for our growth

strategy to truly succeed. Partnering with a company of the quality,

expertise, and geographic distribution reach that IEC represents, will

allow us to significantly expand our capabilities to better meet all

our European customers' needs, and to get there much faster than we

could on our own."

Under the new structure, the company's French, UK and newly

incorporated German subsidiaries will sell and provide local marketing,

customer service and technical product support for both the Schwinn and

GT brands in their respective markets. Two newly formed organizations,

GT Europe and Schwinn Cycling Europe, will provide Product Development,

Marketing and European Distributor Sales management for each of the two

Brands. Logistics and distribution will be consolidated on a

pan-European basis, as will administrative services. The company

anticipates the reorganization to be completed by July 2000.

Mr. Bell also announced the following appointments to Schwinn/GT's

European leadership team.

Jurgen Eckmann, who joined Schwinn Cycling Company in 1997, assumes the

new position of General Manager, Schwinn Cycling Europe. Formerly, Mr.

Eckmann was General Manager for Schwinn Cycling GmbH.

Cees de Witte, is appointed General Manager, GT Bicycles Europe. Mr.

deWitte formerly held a number of senior marketing and management roles

with Bell Europe and Giro before joining the company earlier this

year.

Arthur J. Cook, formerly Finance Director for Schwinn/GT UK Sales Ltd.,

is appointed Financial Director for Schwinn/GT Europe.

Scott G. Johnston assumes the role of European Operations Director.

Previously, he was Manager of Operations for Schwinn/GT UK Sales Ltd.

Mark Perryman joins Schwinn/GT UK Sales Ltd. as its Commercial

Director. Mr. Perryman was formally the Director of European Promotions

for Perseco, the company that manages the in-store promotional activity

for McDonald's restaurants.

Raymond Chastel joins Schwinn/GT as General Manager of the company's

French subsidiary, Riteway Products France. Raymond is a principal

with Aton, Ltd., a consulting firm specializing in turnaround

situations.

Christopher Kerfoot has been named interim General Manager for the

company's new German subsidiary, Schwinn/GT GmbH. Chris formerly held

a series of senior marketing and general management roles with WD 40,

the all-purpose lubricant company, and with the CIC Video

International.

"Both Schwinn and GT have the potential to become the two leading

global cycling brands of the next century", said Bell. "If GT and

Schwinn are to win in the tough European market, we must become a more

effective competitor. We need to be leaner, and faster as we redeploy

resources into continuing product improvements, new product innovations

and increased marketing support. Most importantly, we need to be a

simpler and more responsive company for our customers to do business

with if we are to realize the company's full growth potential, achieve

our earnings goals, and create a bright future for our people."

Schwinn/GT Corp designs, markets and distributes a wide range of

cycling and fitness products worldwide. Wholly owned by Questor

Partners, Schwinn/ GT Corp was formed by the merger of Schwinn Cycling

& Fitness Company with GT Bicycles, Inc. in October 1998.

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