Lapierre and Raleigh parent company said to have 'unsustainable' finances

Accell Group, the company that owns bike brands Lapierre and Raleigh, has had its financial rating downgraded, due to its “unsustainable” capital structure. 

Top credit ratings firm Fitch has lowered Accell’s long-term default rating to CCC from B-, meaning the business is deemed to be at “substantial credit risk”. 

In a statement, Fitch cited overstocking in the bike industry and weak consumer demand as causes for the downgrade. 

It said: “The downgrade reflects our expectation that the group's EBITDA (earnings before interest, taxes, depreciation and amortisation) margin will drop to low single digits in 2023-2024 because of excess inventory stock in the market and weaker consumer demand, which together with high competition will lead to a deeper discount environment for a longer period than we previously assumed.

“We believe the current capital structure is unsustainable due to a material drop in profit with only a gradual recovery assumed from 2025. Accell has a corrective action plan, but it is subject to meaningful execution risk, casting substantial uncertainty over the near-term restoration of its credit profile.”

This is the second time this year that Fitch has lowered the company’s rating, downgrading it from B to B- in September.  

Netherlands-based Accell Group describes itself as the European market leader in e-bikes, with its portfolio counting brands such as Lapierre, Raleigh, Haibike and Koga.

In a press release shared with Cycling Weekly, a spokesperson from Accell Group said the company has “sufficient liquidity” thanks to €250million (£216.5million) in funding from its parent company, KKR. 

“The market circumstances will gradually improve, and we have a long debt maturity profile,” the Accell Group spokesperson said. “The liquidity injection significantly strengthens the company and boosts our confidence that we will come out on a stronger footing. The long-term outlook for the business is favorable.

“While the short-term bike market has remained volatile in recent months, the mid-term bike market fundamentals are expected to remain strong, with significant growth opportunities for scaled players, like Accell Group, and a continued acceleration towards high-end e-bikes.” 

Last month, Accell Group announced it was scaling back Raleigh’s activities in the UK, closing the brand's parts and accessories business and outsourcing its warehouse operations. 

Lapierre also ended its partnership with men’s WorldTour team Groupama-FDJ after 22 years. The squad will ride Wilier Triestina bikes from 2024. 

The spokesperson from Accell Group said recent restructurings were implemented “to take costs out of our business and remain competitive in the long term”. 

“We are taking actions to strengthen the business to weather the current circumstances and position the business for a successful and sustainable future,” they said. 

Accell Group has been under new leadership since October, when new CEO Tjeerd Jegen was appointed to guide the company through a turbulent time for the industry.