Just 18 months ago Susanne Puello, manager of a profitable, century-old German bicycle manufacturer, was suddenly unemployed. After two decades of running Winora, Ms. Puello and her husband resigned over management differences with a new owner, the Dutch cycle group Accell.
They weren’t jobless for long. When the Puellos left Winora in March 2017, they left the company transformed. Over the space of 20 years, the pair returned the struggling firm to profit and boosted sales to more than €400 million ($468 million) from €23 million. Players in the highly competitive bicycle industry, which has seen its share of casualties over the years, took due notice.
Rather than retire, Ms. Puello – the granddaughter of Engelbert Wiener, a German cycling champion who founded Winora’s predecessor back in 1912 – was raring for a new challenge. The 56-year-old sought the backing of Austrian billionaire Stefan Pierer, owner of KTM Industries, the maker of Husqvarna and KTM motorcycles, to open a new cycle manufacturer in her native Schweinfurt, a town in northern Bavaria.
In the space of six months, Pexco rolled out two complete bike collections, including e-bikes from Husqvarna and its own Raymon brand, in 350 variations. Normally, a manufacturer could easily take twice that long to finish such a huge job, but the entrepreneurs were clearly in a hurry, propelled by 30 years of close ties to specialist dealers and suppliers in Asia. True to form in the bike business nowadays, Pexco’s process is international, with the development phase in Schweinfurt, design in Salzburg, and production in Taiwan and Bulgaria.
By the time Pexco opened for business in July, Mr. Pierer had taken a 49.9 percent stake in the company, which now builds electric bikes under the Husqvarna brand (a legendary name in Sweden, where it was founded in 1689). Ms. Puello is managing director and her husband, Felix, serves as head of product development.
There is obviously room in the German market for new entrants, as customers are buying e-bikes in droves. One in two bicycles purchased in the country last year was electrically powered. From 2019 onward, more than a million e-bikes will be sold every year, estimates Bernhard Lange, a board member of bicycle industry association ZIV.
In 2017, some 720,000 e-bikes were sold in Germany, up 19 percent from a year earlier, bringing the number of e-bikes in the country to 3.5 million.
The e-bike boom is proving to be a godsend for the industry, as demand for traditional bicycles is dropping. In 2017, 3.1 million non-electric bicycles were sold in Germany, a 9 percent fall on the year before.
The ZIV thinks the sizzling popularity of e-bikes is due to improved technology, particularly the longer-lasting batteries that extend the range of cyclists. Furthermore, these rechargeable two-wheelers are becoming more accepted in parts of society that used to shun them as something only for the older set, slackers or wimps. There is now a crush of e-bike suppliers in Germany – Bergamont, Focus, Kalkhoff, Pegasus, Scott and Trekk, just to name a few rivals of Pexco.
Inspired by Pexco’s early success, the Puellos have ambitions to become global players. By 2022 Pexco, with its 39 employees, intends to pump out 100,000 bikes a year for annual sales of at least €200 million, according to Mr. Pierer. The next goal is to expand into Southern Europe and Scandinavia – a doable journey, as their popular models travel well.
Katrin Terpitz covers companies and markets at Handelsblatt, focusing on Germany’s Mittelstand and family-owned businesses. Jeremy Gray is an editor at Handelsblatt Global. To contact the authors: firstname.lastname@example.org and email@example.com