International Dealer News IDN 140 December 2017 / January 2018 | Page 10
news ROOM
Business as usual as
Touratech eyes new
investment options
The news that German adventure
tour specialist Touratech had to
file for bankruptcy protection in
August sent shockwaves around
the European parts and
accessory market.
However, it has emerged that the Black
Forest-based specialist has mostly
been a victim of its own success and
of the kind of expansion and new
building issues, especially software
traumas, that can be hiding around the
corner for any successful enterprise.
In speaking with founder and
Adventure Tour visionary Herbert
Schwarz at EICMA he confirmed the
stories that had been appearing on the
internet about the reasons they ran out
of money and the really still very
positive prospects for the business
moving forward.
Schwarz started the business in 1990
at a time when the Adventure Touring
sector was an unheard of niche within
a niche. Fast forward to 2017 and it is
responsible for 20 percent of new
model sales in Germany and is one of
the fastest growing motorcycle
industry sectors worldwide.
“Yes, when we started we were doing
something new, but even we couldn’t
have imagined just how far the market
would evolve - we were sure that we
couldn’t be the only ones who had the
same ideas about riding and enjoyed
the same kind of experiences.
“It turns out we were right, and just
look how far the market has come. Our
growth has always been carefully
managed, and I have to say that even
following the banking crisis in 2008
we continued to grow. Space had long
been an issue for us and having not
been able to buy the land adjacent to
our existing building we broke ground
on a new site 400 m away from the old
building in late 2015. The warehouse
10
itself went up very quickly, the fabric of
the construction was completed by
July 2016 and the logistics and
software issues we encountered as we
commissioned the building really set
us back.”
The new space is an 8,000 sq m
warehouse, logistics, product planning
and offices complex with a 1,000 sq m
retail shop on a 20,000 sq m site. The
next step was then to move and
consolidate manufacturing into space
made available in the old building
shop space, and that is when the
problems really escalated.
“We bought new machinery, such as
laser cutters and automated welders
and encountered massive production
software issues. It meant production
slowed up, inventory ran down and
sales followed on a downward cycle,
down 25 to 30 percent by this
summer.
“Rather than making sales, our sales
people were having to explain why we
couldn’t fulfill orders and we had to
tell our OE customers, BMW, KTM and
Ducati, that we couldn’t keep up with
their supply schedules. It was a really
bad position to be in.
“Inevitably, the inability to make
enough product soon enough resulted
in us running out of money, and the
August filing was the only way for us
to protect the business, our employees
and our customers.”
Asked about the employees Schwarz
said “we haven’t had to lay anyone off
as a result of the bankruptcy. Some
people have left through the natural
course of things and from around 380
people we are now at 360, but the
restructuring plan that the insolvency
INTERNATIONAL DEALER NEWS - DECEMBER 2017 / JANUARY 2018
specialists have implemented will see
that grow back towards 400 quite
quickly in 2018.”
In terms of the capital injections
needed to continue trading and
resolve the issues, especially the
production software problems,
Schwarz says that “we have now been
in a position to be able to build
production back up again during the
insolvency process and once a deal is
done for new capital and ownership
the company will be able to start
meeting new orders again.”
Schwarz says that the interest in
investing in or acquiring Touratech was
massive. “We very quickly had some
150 or so expressions of interest from
investors. That was reduced to 40
serious candidates, and that in turn
was down to about 10 bidders as we
headed for EICMA.”
By the end of the show it was expected
to reduce this further to a short list of
five offers, and with due diligence
underway he expects the process to be
concluded by the end of the year.
“I think it is quite certain that the
details will be finalised by the end of
December and that Touratech will be
able to exit the insolvency process and
start to grow again by the start of
2018.”
Asked about the company’s OE
contracts, in terms of how robust the
backing from them was Schwarz said:
“They have all been very supportive
and will stay with us. Our aftermarket
distributors have also been very
positive, pledging in the region 50 m
euro of orders over the next three
years.”
www.touratech.com