The 2020 Tucker Powersports Dealer Expo at Fort Worth, Texas, in January was revealing - it reflected the issues that the company is faced with following the MAG "Unwind" but, in equal measure, also reflected the determination of new CEO/President Sebastian Bretschneider and his "Stronger, Focused Leadership Team" in tackling the issues and getting the "House of Brands" back on track…
The decision to "unwind" from Motorsport Aftermarket Group (MAG), taken last year by the Monomoy Capital Partners appointed board, has been widely applauded.
When the V-twin parts and accessory industry was experiencing record growth in the late 1990s and early 2000s, the MAG concept, developed by San Francisco based investment management house Duff Ackerman and Green, was an essentially sound one - namely to bring together market-leading aftermarket brands on a shared management and capital basis.
However, it did not survive the economic downturn and ever since there has been a scrabble to make sense of a one-time critical mass that had become a liability.
Ownership transitioned ultimately to a consortium of three private equity investors - Blue Mountain Capital Management, Contrarian Capital Management and Monomoy Capital Partners as lead/managing investor - who set about rebuilding the trading structure and management teams at each of the individual business units.
The vertical integration concept had clearly failed - deemed not suitable in a declining and relationship-based market.
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| Sebastian Bretschneider, CEO/President: "The process of the MAG "unwind" proved to be a great deal more expensive and complex than anticipated." |
In what AMD described at the time as the powersports industry's "ultimate mic drop," Monomoy and MAG CEO Hugh Charvat embarked on a big unwind, eliminating the entire MAG management level, overhead and structure and restoring direct-to-board reporting and decision making to each of the individual business units. "No longer are we conducting brain surgery wearing boxing gloves," as one of the company presidents put it to me recently.
Having now met three of the company presidents concerned, it is quite clear that the ability of each of the group's businesses to steer their own fortunes is now much enhanced, and in the case of Tucker Powersports, the 'tough love' that CEO and President Sebastian Bretschneider has been hired to deploy, will return Tucker to being an effective competitor for the market's leading distribution businesses. It is already yielding results.
The process of "unwind" proved to be a great deal more expensive and complex than may have hoped would be the case, resulting in a poor run for the distributor in September, October and November 2019 with inventory levels below optimum and fill rates suffering as a result.
However, an August 2019 refinancing and sequence of strategic improvements, including supply chain improvements, has already started to feed into the balance sheet, with company targets being met in December and, by the time of the Dealer Show, Tucker was well on the way to doing so again in January.
Among the supply chain improvements was at least one blindingly obvious change - moving their Asian inventory 'Break Bulk' container processing from Georgia to their Visalia, California warehouse just 200 miles north of the port of Long Beach. What it was doing in Georgia in the first place kind of begs the question, but this simple initiative alone has, apparently, saved between ten and twenty days of delay and inventory darkness between product being landed and being available to dealers on the shelf in their local distribution center. A time deficit that was often longer than the sea freight shipping time itself.
Bretschneider described this as a "big win, and our team has delivered many more wins in the short period of time we've had." Some of the changes implemented were indeed tough ones. Staff were laid off (again not least several V-twin sector outside sales representatives), and the Dealer Show itself demonstrated the management team's determination to be "realistic" about expenditure.
The result of increased vendor participation pricing, the fall lock-down on POs during the 're-fi' and the resulting inventory and payables issues have all contributed to a smaller show footprint.
However, though small, what was there was perfectly formed. A goodly number of dealers still found plenty of vendors and show specials in a rebuilt expo environment that, in my humble opinion, and that of many vendors present, did a good job of presenting brands in a real-world dealer showroom centric display design with a 'market place' ambiance that broke down barriers, allowed dealers to engage more easily with vendors they may have skipped in the conventional serried ranks of pipe and drape trade show environment, and which encouraged vendors, sales representatives and their dealers to commune in a way that generated a positive vibe - one which successfully delivered the often competing virtues of doing business and socializing.
If all goes to plan in the coming year, breaking down that in-built tension between sometimes mutually exclusive dealer expo objectives will have given Tucker and their sales representatives something to build on for the years ahead, and kudos to the team that pulled it off.
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| Greg Blackwell, Chief Commercial Officer: "Improvements to the customer's experience, customer service responsiveness, fill rates, time to shelf, dealer website functionality and supply chain improvements are 'wins' that are already translating into sales." |
Bretschneider readily admits that he is new to the powersports industry, but he is not new to turning businesses around and helping them to achieve their potential - and, to judge by his resume to date, he is very good at it.
Along with industry veteran Greg Blackwell, as Chief Commercial Officer leading the company's sales and marketing functions, Bretschneider certainly didn't seek to duck the issues, openly addressing the show each day with an honest and transparent appraisal of those issues and where they were at in the cycle of addressing them. An approach that will have done much to restore credibility and help rebuild confidence with vendors, dealers and team members alike.
He said he had four key messages for stakeholders and the industry at large and one key objective for the business - namely to become the powersports dealers' distribution partner of choice, providing opportunities for dealers to sell and to do so with increased profitability.
Those four key messages start with a plan to embrace what I guess could be described as the low hanging fruit first, namely to exploit the opportunities that "move the needle the most" in what Bretschneider says is "an opportunity-rich environment."
Secondly he said that one of the most important things that he and his management team had to do straight away was to "decide what NOT to do. This is very hard and requires real management discipline. It means that we will have to accept that we will continue to suck in some areas before we are able to address everything."
I told you he was being honest and transparent - he clearly accepts that this trip to the last chance saloon really is Tucker's last opportunity to turn it around and get it right.
Bretschneider says that deciding what not to do and sticking to that has already allowed them to focus in depth on implementation of the development of the solutions the issues need and, subsequently but very quickly, allowed them to move on to implementation of those solutions - institutionalizing them into the DNA of the organization "so that we can move on and never have to touch that topic again - once it's fixed it should stay fixed."
Finally, he says that this process buys them the opportunity to "press the repeat button and select the next set of priorities to address." This is the simple, basic, fundamental and effective project management analysis and practical as well as strategic thinking of a man who has clearly been there before when confronting organizational dystopia. Hurrah!
If Hugh Charvat can be said to have been the man to serve up the opportunity, then it looks like Bretschneider may well be the man to volley it.
Reminding his audience that their owners include the retired teachers, police and firefighters who invest their retirement money through private equity funds of the kind that Monomoy, Contrarian and Blue Mountain operate, Bretschneider and Blackwell list improving the customer experience, the responsiveness of their customer service, fill rates, time to shelf, dealer website functionality, programs, dealer marketing and social media support and supply chain improvements as other substantial "wins" that are already in-play.
However, in conclusion he circled back to that first key objective he has for the business - namely to improve the profitability improvement opportunities that Tucker's products and services represent for their dealers: "We can only be strong and profitable if we are helping you, the dealer, to be strong and profitable. With the backing of our vendors and our great team members we believe we are already on the right path and it will be my job and the job of our management team to keep us there."
Tucker University
Set in motion by Jim Barker, and benefitting from early stage platform input from Vance & Hines' John Potts, Tucker Senior Director of Marketing Taz Sobotka has completed plans to create a brand training platform for dealers.
Working with Brandecation CEO and founder Rich Maychrich, Sobotka has masterminded Tucker Powersports' substantial investment in education "to continue bringing value to dealers through a strategic partnership with Brandecation." The outcome is the launch of Tucker University - TuckerU.
"Our dealers tell us education is critical," stated Sobotka. "They tell us consumers are more educated than ever when they walk through their door, so it's our responsibility to help educate their dealer staff. We're proud to launch TuckerU to help do just that.
"For brand partners choosing to join Tucker University, it means direct access to Tucker's 150+ person sales team and over 8,500 dealers. Users of the TuckerU platform learn, test and retain specialized product information at their own pace. TuckerU provides direct access to training courses and certifications in one convenient location, 24 hours a day, 7 days a week, 365 days a year."
Maychrich said: "We're excited about this new partnership. It's amazing to see the number of brands coming to us knowing they can get plugged into TuckerU. This strategic partnership is a win-win for everyone. TuckerU includes valuable brand and product knowledge on powerful brands distributed to powersports dealers across the nation.
"It also includes custom training modules on retailing, merchandising, marketing, and other areas. Each of the training courses come with a testing and certification process."
Brands already enrolled in TuckerU include Arai, Metzeler, Bikemaster, QuadBoss, DragonFire Racing, Twin Power, ProTaper, Speed and Strength and Answer Racing, with more to follow. "Our goal is to help our dealers and field sales team have a centralized place to go for education. This is an area of focus in bringing value to our customers," says Sobotka.
Founded in 2014, Brandecation's web-based training solution for professionals and enthusiasts is an "immersive and educational platform free from the limits of a classroom," says Maychrich. "The platform allows businesses to provide education to the desired users regardless of geographical location. The targeted information, excellent accessibility and intuitive design eliminates the learning curve, leading to greater user involvement and retention. The Brandecation analytic package provides detailed information on various performance metrics, providing comprehensive data and return on your objective." www.brandecation.com
Twin Power - "Quality, Functionality and Value"
Industry veteran James Simonelli continues to guide the development of the Twin Power program with all the insights and assurance that comes from 30 years of specialty V-twin industry, racing and custom bike building experience - indeed 'back in the day' James used to buy and use Twin Power product himself.
A first new print and online catalog since 2016 with 116 pages featuring "products for yesterday’s classics and today’s standards" from pistons for Ironhead Sportsters to high-tech Lithium-Ion batteries and oils designed specifically for American V-twin engines.
Today, Twin Power has more performance parts for more model applications than ever - "each one tested in independent labs to ensure they fit and work as they should," says James, "all the while staying true to our philosophy - if we don't run it on our own rides, then we won’t sell it to you."
www.twinpower-usa.com
'Techno Tracker' - It could be yours!
Designed for Tucker V-Twin by Dan Riley at Gunn Design of Burnsville, Minnesota, the Tucker 'Techno Tracker' recently scored a showcase by BikeExif.com and was the featured bike at the 2020 Tucker Show.
Riley got the air cooled Yamaha XS 650 parallel twin donor bike from Craigslist for a mere $650.00 and went 'bolt-on' using as many parts as possible from the Tucker catalogs, including ProTaper bars, TBR Comp S mufflers, Mikuni VM34 carb kits, with DNA filters from Greece, British made Talon hubs with Excel rims, Spanish made Galfer rotors and brake lines and 444 Series Progressive Suspension shocks. Having been on display at the One Show (Portland, Oregon), the bike will be shown at Mama Tried in March (Milwaukee), the Handbuilt show on MotoGP weekend at Austin, Texas, and the inaugural META Vision Moto Project (May 8 - 10, Denver, CO).
After that one lucky Tucker Powersports dealer will win the 'Techno Tracker' and get to take it home!