BikeBiz: You were previously in finance at CSG UK – how did the new role come about?
Mark Broughton: I joined CSG in 2010 as finance manager. With the steady growth of the company since then, driven through the addition of the Cannondale brand to the company’s portfolio, my role progressively grew to Finance Director.
Tell us about your business life pre-CSG:
I attended Aberystwyth University – getting a degree in accounting and finance, before joining KPMG on their graduate training program – which included qualifying as a Chartered Accountant in 2004. I spent most of eight years working in and around the Midlands looking after all kinds of different businesses from small local business to large global companies. My specialist areas included retail, pensions and I had various technical accounting roles with the company. I moved to Dorset to take a position with a local firm that happened to be advising Hot Wheels business prior to its sale to Dorel. The rest is history.
You’re a cyclist and a fan of the brands CSG has – what bikes do you own?
Currently I own three bikes – I have a Cannondale Evo Red Racing, a GT Zaskar hardtail mountain bike and a Cannondale Bad Boy commuter.
I have two memories that have stayed with me – from childhood it would have to be riding my mountain bike around Western Park in Leicester and more recently participating in the Macmillan Dorset Ride with my wife during the summer. It was very hot, but was great to see everyone out there enjoying their bikes in the beautiful Dorset countryside where we are so lucky to live.
Now you’re at the helm, perhaps you could tell us a bit about the CSG strategy going forwards:
We are a little bit different to our main competitors given we have a portfolio of different brands across a broader selection of markets sold through multiple distribution channels. We have a really diverse dealer network and we are identifying those dealers who want to work with us to grow together.
Without giving too much away, we have programmes that we will be rolling out into 2014 to help our dealers showcase our products better. We will be launching those initiatives at The Bike Place Show at Silverstone in January.
How big a part will BMX play in the business and how are you handling the downturn?
BMX has been tough over the last nine months in particular, which has made us restructure our team with a dedicated phone line and staff to make it easier for the BMX shops to buy from us. There was definitely over stock in the market from the big players, but we are starting to see improvement in this situation. We have two of the best brands around in Mongoose and WeThePeople and we are seeing sales improve as we start moving towards Christmas, with deliveries sold out before they arrive.
As we all know there is definitely a cyclical nature to BMX, but we are continuing to invest in marketing and that, coupled with the wider business resources we have, makes us well placed to work with our dealer base to navigate our way through. Fortunately, we aren’t reliant on the BMX market but as the company was founded on BMX we certainly wouldn’t neglect it either, especially in tougher times.
Any further labels joining in the year ahead?
We are currently in negotiations with some exciting brands to add to the CSG portfolio. Our parts, accessories and clothing business is growing quickly and we have plans for this to continue. Like many quality distributors we are approached constantly by companies looking for distribution, but everything we do has to be complementary and beneficial.
What challenges to CSG and the wider business do you foresee going into 2014?
There seems to be a wider belief that the streets are paved with gold in the cycling business. We are seeing lots of new businesses setting up and this obviously adds competition to existing shops and can bring outside skills into the industry. Not every new shop will succeed and it’s important for us to pick the good ones to partner with.
What incentives will you be offering dealers to do business with CSG UK in future?
We know we have some strong product that dealers want to hold in stock, but there is more that can be done to ensure that we are the first choice for our customers. We have invested heavily in B2B over the last few years and have put a lot of time and effort into our buying processes to ensure we are improving in terms of stock holding. Beyond this we have major plans for developing our POS offerings for our dealers.
How will you go about maintaining good margins on your brands for trade accounts?
It’s crucial that both our dealer base and ourselves make reasonable margins. Different brands have different approaches to this. We have a pretty simple approach, which is transparent and allows everyone to understand what they are making.
Did Russell Merry leave you with any parting wisdom on running a firm the size of CSG?
Russell remains a good friend and I certainly enjoyed our time working together. We are very different in our approaches to management – which given our different backgrounds is not surprising. The industry in which we operate is pretty unique and Russell’s parting words to me were ‘Each year try and get it less wrong’. Given the success and growth the business has seen over the last four years this a pretty big ask.