Shares in the Accell Group have fallen dramatically, at one point shedding just over 39% in the past month’s trading before bouncing back this morning from an annual low.
Down just over 19% at its peak yesterday, the shares traded briefly as low 17.82, down from 29.30 as recently as February 19th.
The past week has been notably rough for the stock markets in general, which have reacted adversely to the spread of the Covid-19 Coronavirus and the slowdown in global trade attached. This morning shares have bounced back by 13.6% at the time of writing to reach 20.25.
Speaking to CyclingIndustry.News this morning MD of Raleigh UK, which falls under Accell’s portfolio, said: “These are challenging times for all in the bike industry, that’s fairly well documented and certainly is reflecting among our competitors that i’m speaking with. China is a fairly big part of ours and the industry at large’s supply chain, so daily we are assessing the likelihood of supply chain delays and it’s hard to know at the present time the extent of those delays.
“That said, we are we are well equipped to overcome short term delivery issues as our stock levels are strong. We can certainly meet needs of our customers for at least three to six months and parts and accessories are of little concern as supply comes from all over.
“For our employees we have taken steps to minimise the impact on them with a flat travel ban across the group in place and some working from home. Business will keep going throughout Europe, perhaps only with some disruption within Italy. There is, as the present time, no need for our customers to behave any differently from normal, we’re well equipped to manage this.”
During 2019 the Accell Group was one of the bike industry’s stock market’s bulls, rising consistently throughout the year through to February’s high.
Though the beginning of the Accell Group’s decline predates the release of this week’s annual report, more closely aligning with the rise in Coronovirus panic, investors do seemed to have been spooked by the firm’s significant decline in profits, which year-on-year dropped from €20.8 million to just €2.8 million in 2019.
The sale of the firm’s loss-making american business, as well as lacklustre performance in the DACH region (Austria, Germany, Switzerland) were seen as factors having larger impacts on revenue.
New developments are expected to face some delay, according to the annual report, which also astonishingly revealed that traditional bikes only made up 16% of the group’s net turnover.
In an unrelated twist, it appears as though Diavelo brand founder Brian Hoehl may soon begin a legal action against the Accell Group in relation to ownership of the label.
Hoehl, who worked for Accell Group and its subsidiary business Protanium B.V. for over 13 years claims ownership of the brand, telling CI.N: “I have asked Accell group to show me the evidence in form of an acquisition agreement of the Diavelo brand without any success. Now the next step is to go to the court.”
Accell told CI.N that they believed the situation to have been resolved previously, stating that an agreement had been reached. “We have full confidence on that matter,” we were told.