Jul. 21, 2008 – Global opts out of metric aftermarket

Global Motorsport Group is leaving the metric side of the industry to concentrate on product development and its proprietary brands in its core market, the V-twin segment.
The Morgan Hill, Calif.-based national distributor recently announced it would be shutting down its Motorcycle Stuff operations. However, that’s not to say the Motorcycle Stuff brand, which has been around for four decades, won’t resurface. Steve Veltri, Global’s vice president of sales and marketing, said the company has received quite a bit of interest from parties regarding the metric brand, which was created in 1971.
The decision to leave the metric segment was accompanied with employee layoffs, the extent of which Global would not comment on, and a reduction in warehouse space. Global will still keep its three warehouses in Visalia, Calif., Cape Girardeau, Mo., and Harrisburg, Pa., open, but now will lease less space in each facility, Veltri said.
The decision to solely focus on Custom Chrome, Global’s V-twin market distributor, “became apparent following the purchase of (Global) by DAE-ILL USA Inc.,” Holger Mohr, Global’s CEO, said in a press release.
In an interview with Powersports Business, Veltri further explained the company’s reasoning for deciding to liquidate the Motorcycle Stuff inventory and cease operations by the end of August.
“What became apparent was where our core competencies are as a business and as an executive staff,” he said. “I also think with the current industry conditions, resources and dollars spent need to go toward where the most return will be. Unfortunately on the Motorcycle Stuff side of the business, there wasn’t much to differentiate them from our competition. And as we know, that competition is fierce on that side of the business.”
Veltri noted that Motorcycle Stuff’s recent inability to stand out from its competition was due to past management failures to leverage the brand’s opportunities.
“Product development has been the key for our organization. Proprietary products, driving brands and proprietary brands,” he said. “Motorcycle Stuff had opportunities in the past with exclusives that existed and because of quite frankly mismanagement of the past, and no fault of Motorcycle Stuff by any means. It was the same management that was running this side of the business as well. And we felt it, believe me, a bunch.
“But it was the proprietary products and exclusives that Motorcycle Stuff had at one time that could have been differentiators in the marketplace. Unfortunately those exclusives dwindled down to only a handful that quite frankly didn’t have the impact that they had in years past.”
Will another company step in and try to revive Motorcycle Stuff? That is a possibility, Veltri said, if the right deal with Global comes along.
“The name does have such recognition in the marketplace that for us, it’s not something we’re willing to giveaway,” he said. “The tangibles that are associated with a name like that, the Web presence, the catalog, the trademarks alone dictate that we can’t give that away. So if the right offer came along, yeah we would definitely entertain the idea. But we’re in no rush to sell that name.”
Veltri noted Global has already received interest from outside parties but no deals were reached because of a tight timeline company executives faced.
“We had to move very fast because this is a rebuilding year for us and we had to focus our efforts during this off-season time to get ready for January and February of next year,” he said. “So we needed to move fast and unfortunately there wasn’t anybody that came to the table that was willing to work fast.”
While the decision certainly came with some painful decisions, there figures to be an upside as well. “For us,” Veltri said, “the problem with the business in the past was very much resource-related. What I mean by that is not just capital but management focus and direction have been an issue for Global Motorsport Group as a whole.”
Shutting down Motorcycle Stuff “gives us an ability to focus solely on what we believe to be our core business, which is the American V-twin side of the business.”