Avanti bike founders cut remaining ties with the business, selling to Scott Sports

Tuesday 24th April 2018

The Struthers family, which founded the Avanti bicycle brand and built Sheppard Industries into the largest cycling company in Australasia, has cut its final ties to the business, selling its remaining shareholding to a Switzerland-based company, Scott Sports.

The family sold most of its shareholding in the business to Scott Sports in 2015, and exited its remaining holding in December for an undisclosed sum. Kim Struthers, the son of founder John Struthers, stepped down as New Zealand country manager last month and the Struthers family no longer has any connection with the business.

The Avanti brand has become a household name in New Zealand, providing bikes for the country's Olympic athletes like gold medal winner Sarah Ulmer and sponsoring the 'Avantidrome', the National Cycling Centre of Excellence velodrome in Cambridge.

Company founder John Struthers has previously detailed how the business began in the early 80s when his children got into BMX riding as the sport was gaining in popularity. That prompted the engineer to to turn his recently-purchased business Sheppard Industries, a rubber merchant with a small component of bike accessories, to bicycle production, building it to the largest wholesaler of bicycles and bicycle parts and accessories in Australia and New Zealand.

Reports of the early days of the company talk of Struthers tinkering in an old warehouse that used to be a picture theatre in Auckland's Ponsonby, with import restrictions at the time forcing the firm to make everything themselves, including the frame and the handlebars. Protective padding on the BMX bikes was moulded into shape by the Struthers children and their friends using the the family oven, which meant dinner was often late.

The company went on to manufacture 10-speed road bikes and the Avanti brand, Italian for 'moving forward', was born in 1985. When steel frames were replaced by alloy and later carbon, manufacturing moved overseas to China.

The tie-up with Scott started in 2010 after Avanti's previous relationship with bike brand Specialized dissolved, with Scott stepping into the breach. Scott's later move to buy into the business gave Sheppard greater economies of scale across purchasing, marketing, logistics, retail services and product development, and opened up new opportunities for exports. Scott gained a bigger presence in Australasia, where it lagged behind its rivals, and added more brands to its portfolio.

Scott was founded by American Ed Scott, an engineer who invented the aluminium ski pole. While the company is still involved in skiing, biking now accounts for the majority of its turnover. It is majority owned by South Korea's Youngone Corp, which increased its stake to 50.01 percent in 2015, having earlier bought a 20 percent stake in 2013.

Steve Paraskevas, who was appointed managing director of Sheppard Cycles in 2015 and holds a small shareholding in the company, said the cycle market in New Zealand has recovered well in the last year or two.

"In particular the retailers are experiencing double digit sales growth off the back of strong electric bike sales," he said. "This new emerging category is going through a strong growth phase in New Zealand reflecting the trend globally."

Data from Statistics New Zealand shows 23,326 electric bikes were imported into the country in 2017, up from 13,364 in 2016, 6,899 in 2015, and 2,509 in 2014.

(BusinessDesk)

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