Accell Group has issued a press release announcing its intention to run its US business as a separate, non-core entity. A review of the US business will be conducted in the next few months, while Accell Group explores possible future options, one of which will be to sell the US entity. The main reason given for the separation of US business from the core Accell business is to focus on the elimination of profit dilution.

In recent years, Accell, along with other companies, has been struggling to make a profit in the American market. As far back as July 2015, previous Accell CEO, Rene Takens commented that “In the traditional American bicycle retail trade (IBD) we were confronted with tough conditions and the performance of Raleigh and our bicycle parts and accessories were below expectations.” Since that time despite its efforts, Accell Group has struggled to return profitable-enough performance in the US market.

According to a company press release, Accell expects its Earnings before Interest and Tax (EBIT) to be around 31 million euros for 2018. However, if US business is removed, EBIT would be around 51 million euros.

“We can see that for our core business we are effective in the majority of the markets where we operate, resulting in growth and good margins,” noted Accell Group CEO, Ton Anbeek, in a press release. “We have decided to run our US activities as a separate and non-core entity. This means that we need to reconsider and decide on our US activities in the next 6 to 9 months, apart from improving the results of the US business. While considering future options for the US will require our attention, we expect these measures to free up management time, allowing us to focus more on the further execution of our growth strategy. Looking at the underlying results of the company, we are confident that we are taking the rights steps. It gives us comfort and confidence to reconfirm our 2022 strategic and financial objectives.”