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Tuesday, 6 March 2018

Tucker Rocky/Biker’s Choice

In the first of two distributor shows held back to back in February, Robin Bradley  reports on the Tucker Rocky & Biker’s Choice Dealer and Brand Expo held just north of Dallas, Texas, February 8 & 9

Given the well documented difficulties that the Motorsport Aftermarket Group has been through recently, it came as a pleasant surprise that the overall ‘vibe’ and ‘atmospherics’ at their recent Dealer and Brand Expo were so positive.
While there are some third-party vendors that remain concerned at the way the bankruptcy reorganization filing in November has affected them, the majority have managed to arrive at an accommodation with Tucker Rocky and Biker’s Choice that, at worst, provides somewhat of a satisfactory way out of a less than ideal situation. The positive message of “business as (near as possible to) usual” that the company’s management had communicated before the show was largely playing out - probably better than anybody could have hoped.

‘positive atmosphere’

Vendors exhibited, dealers visited, sales reps wrote orders, everyone got to deliver on the first of the “three pillars of wisdom” with which Sales and Marketing VP Kenan Ikels’ team had approached the event.
There were 140 brands exhibiting at the show including 14 house brands from Tucker Rocky and Biker’s Choice (such as Twin Power and BikeMaster); MAG business units such as Vance & Hines, Burly Brand, Performance Machine and Progressive Suspension, RSD hard parts (the Performance Group), Kuryakyn and Mustang Seats (the Accessories Group) Speed & Strength, Black Brand, Answer Racing, Firstgear and RSD Apparel (the California based MAG Apparel Group) plus notable businesses from the Off Road Group such as Renthal, Dragonfire, Quad Boss and ProTaper.

Kenan Ikels, VP Sales & Marketing: “We trialed a new Team Sales plan last year,
we have been able to refine the concept, and implement it nationally”

So, the content was certainly there, for the V-twin, ‘mainstream’ and off-road sectors of the market. Despite four years of market decline and the recent difficulties, the overwhelming sense among the exhibitors was a positive one where the prospects for 2018 are concerned - especially among the hard parts, accessories, service, tuning and performance community.
One of the classic signposts to market optimism, in any market, is investments in R&D and new products and in brand and product promotion, and in both respects the show was a success. It was content-rich in terms of new products for dealers to get excited about (look for the reports in this and upcoming editions), and if we here at AMD Magazine are a bellwether of marketing dollars, then yes, vendors are anticipating better sales this season.

 ‘most difficult of expo intangibles’

Regardless of the background to the acquisition of the MAG businesses by former Tucker Rocky owner Lacy Diversified in early 2014, and regardless of the market decline and debt servicing burden that brought about the reorganization filing in November 2017, the company is currently well funded and shaping its forward business plan.
It is doing so in advance of emergence from the legal process this spring - expected in early April - at which point the new owners (Blue Mountain Capital Management, Monomoy Capital Partners and Contrarian Capital Management) will have acquired 100 percent ownership.
Meanwhile, Biker’s Choice management and their sales team are doing an excellent job of producing an environment in which that third and most difficult of expo intangibles can play out - “community”, as Kenan Ikels termed it succinctly.
In an era that appears likely to be characterized by the absence of independent trade shows (as far as the spring buying and selling season is concerned), the danger is that the biggest loss, especially with the demise of the V-Twin Expo at Cincinnati, was likely to be the opportunity for relationships and friendships to be forged, reinforced and renewed – simple good old fashioned face-to-face contact making.
However, while Tucker Rocky and Biker’s Choice, their sales teams and the dealers who visited, quite rightly kept their “eye on the prize” in Texas as far as the buy and sell of the show was concerned, the company managed to create an ambiance in which the off-balance sheet values of trade shows was able to prosper. Kudos to all for being able to achieve that at this most difficult of times.
We met with Tucker Rocky President Eric Cagle and VP Sales & Marketing Kenan Ikels, and rather than talking too much about the recent past, we focused on the present and the future.
That said, Cagle is of the view that the company has emerged stronger from the process, and better placed to continue the progress that the all new management team has been making in the prior 18 months. “From an operations perspective, much has already been done,” explained Cagle. “We haven’t lost a single person as a direct result of the filing - our staff attrition rate has remained the same before and after.

 ‘7 percent improvement in Facing Fill’

“Neither have we lost any customers. Sure, there have had to be some conversations in which we have sought to reassure customers, but our transparency has made sure that everyone, customers, staff and vendors, understood that the biggest long-term impact is the shedding of some $350m of term debt, resulting in debt service payments reduced by $20 m or two-thirds - giving us the financial resources to continue with planned operational improvements and a 700% improvement in our capital maintenance budget.
 “It is all about continuing to provide our vendors and our customers with ever improving service levels right across the board. We understand that competition is vital and we are focused and determined on being the best competitor and business partner in the powersports market.

Eric Cagle, Tucker Rocky President

“Essentially this is a simple business. We are an intermediary. We bring skill sets and scale that vendors and dealers can’t achieve without an effective logistics partner. We work with our vendors, and dealers to support their businesses and help them grow. That is our job, and that is what we are 100 percent focused on.
“Moving forward our job is to do that even better, and what the market has seen from us in the past 18 months is a series of tactical moves to provide the platform for continuous improvement. We have staffed key positions, many of which hadn’t previously existed and there will be more appointments in the future, but the biggest thing has been to address the service levels we provide for our partners - vendors and dealers.
“We have made huge improvements in our inventory management for example. We are becoming more disciplined and we are certainly managing inventory smarter. The ‘Facing Fill’ that we have been providing our dealers, that’s the service level from their local Distribution Center (DC), improved by 7 percent last year to a level that is significantly above anything that Tucker Rocky had operated at previously.
“The filing in November created a ‘blip’ in that progress, but we are already very nearly back to that level now and for 2018 we will implement further improvements that will generate an additional 2 to 3 percent improvement. Additionally, our order to delivery timeframe has improved by 10 percent and 99.5 percent of our orders are leaving our warehouses same day.

‘we haven’t lost any customers’

Cagle says he sees nothing on the horizon that suggests the five DC network will change. He describes their locations as providing as near to optimum domestic U.S. logistics as is possible according to all the “center of gravity” studies they’ve seen, with the head office DC at Fort Worth, Texas, and others at Bolingbrooke, Illinois (near Chicago), Olyphant, eastern Pennsylvania, Jacksonville, Florida, and Visalia in central California.
As to the inventory in DCs, “we are managing better and smarter through “better forecasting and Purchase Order management.
“We will spend more time and attention to detail on our vendor relationships and vendor performance management. Historically we have not done as good a job on that as we should and could be doing. We started in 2017 by giving a selected group of our vendors a better forecast of demand. We now plan to roll that out to as many of our vendors as possible through 2018. The beneficial impact of that may not be evident until into 2019, but it certainly will have a positive impact.”
Kenan Ikels went on to explain the changes that have taken place in their sales organization. Previously either inside or outside sales would “own” an account, and if it was dealt with by inside sales, then that dealer would rarely be visited by an outside sales representative. Conversely, the outside sales force was restricted in terms of the back-up, support and resources they were able to call up on to better serve their customer.”
Ikels said that: “We tried a new Team Sales model last year, with 10 selected markets, and learned from that, finding out what worked and what was needed. We have been able to refine the concept, so we have been able to implement it nationally.
“Now, the outside sales representative is the primary but not sole dealer-facing resource our customers have to support their business with us.

‘ever improving service’
“The outside sales representative can now call on an array of support, from helmet and apparel specialists to street or off-road specialists, specialty product or brand training support, depending on the business opportunity that the dealer has. Our sales team can also call on IT support and logistics experts, marketing help, social media training - a full range of back-up to help us to be a genuine partner for our customers that helps them to make the most of the business opportunities their local riding population represents.
“If a shop is having a ‘Bike Night’ or other form of dealership event, then there is a team of supporters that can now attend to help make the most of the opportunity and add value to the experience for customers.
“This means we are better able to understand the business profiles of our dealers, and they have responded very positively to this new approach. Under our ‘Legacy’ sales model dealers had very limited pathways to interact with us, now they will know anything up to four, five or six people at our company who can help them.
“Previously our inside and outside sales were, effectively, competing with each other, now they are all part of account-based teams. This is an entirely new culture that Eric is creating, and the results are already starting to speak for themselves.”
Asked if Biker’s Choice had increased the level of dealer buy-in, in line with practices seen elsewhere in the market, Ikels said “No. For us it is not about any specific artificial minimum. For us it is about the customer’s commitment to the motorcycle industry.
“One shop’s $5,000 may be another shop’s $50,000. Ours is a level playing field approach. As far as we are concerned all opportunities are equal opportunities in terms of their importance to the motorcycle industry, and we want to help all our customers make the most of their local opportunity. We want to help them leverage what we have to offer and to make the most of what we and our vendors can do for their bottom line.
“If we are able to grow all our dealers’ businesses and, crucially, do so profitability, then everybody wins. We would take a great deal of satisfaction in helping smaller shops make more money, just as we would in helping a relatively modest sized vendor grow their business. It really is all about partnership and our improvements, so we can improve the quality of that partnership for all concerned.”