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Pacific Founder Hornung Exits After 29 Years

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  • geneb
    *** Pacific Founder Hornung Exits After 29 Years *** MADISON, WI-- 12/04/2006 After close to three decades as Pacific Cycle s main man, Chris Hornung felt the
    Message 1 of 1 , Dec 4, 2006
      *** Pacific Founder Hornung Exits After 29 Years ***

      MADISON, WI-- 12/04/2006
      After close to three decades as Pacific Cycle's
      main man, Chris Hornung felt the timing was
      right to exit at year's end.

      “This was a decision I’ve made over the past year,” s
      aid Hornung, founder and chief executive officer at Pacific.

      In 2004, Hornung signed a three- to five-year
      performance-based contract with Dorel, parent
      company of Pacific. “I didn’t know at that point
      in time what decision I was going to make.

      They’ve already delegated much of my responsibility.”

      Hornung said he leaves the company in capable
      hands with Pacific president Jeff Frehner at the
      helm. Frehner takes over duties from Hornung Jan. 1.

      “His vision grew an idea to a $400-million-plus global
      company and positioned Pacific Cycle as the industry
      powerhouse it is today,” Frehner said. “We’re going to
      miss him and I wish him well.”

      For Hornung, the time seemed right to pursue other
      interests and opportunities, none of which are in the
      bicycle industry. “It would be difficult to find something
      that wouldn’t have an impact on Pacific Cycle,” he said.

      “I wouldn’t do anything to compete with Pacific.
      This departure is very friendly.”

      Looking back, Hornung said he’s most proud of
      creating a company from scratch. “I basically started
      with no money,” Hornung said. “We’ve become one
      of the leaders in the industry.”

      Hornung made a name for himself in the industry for
      supplying bicycles to the mass-merchant channel with
      frames sourced overseas.

      “He had an extremely successful model,” said Jay
      Townley of the Gluskin Townley Group. “He brought
      major brands to the mass merchants.”

      Hornung said the company’s move to source bicycles
      in Asia was “slightly ahead” of the competition. But it
      was at a time when “domestic manufacturers were
      struggling to maintain operations in the U.S.”

      Hornung was ahead of the curve again in 1998 when
      he reached an agreement with Wind Point Partners,
      whereby the private equity investment firm acquired a
      controlling interest in Pacific.

      The Wind Point deal gave Pacific the resources to
      purchase Brunswick Corp., including its Mongoose
      and Roadmaster brands, for $60 million.

      The acquisition gave Pacific inroads to the second largest
      U.S. retailer of bicycles, Wal-Mart. At the time Brunswick
      was the largest bicycle supplier to Wal-Mart. Pacific already
      supplied Toys “R” Us, the largest bicycle retailer at the time.

      But Hornung wasn’t done wheeling and dealing.

      In 2001 Pacific outbid Huffy in bankruptcy court,
      obtaining control of the Schwinn and GT brands
      for $86 million. The deal completed the company’s
      portfolio but it didn’t come without consequences.

      Trek, Giant and Specialized all stepped in to counterpunch,
      Hornung said, as many Schwinn/GT dealers viewed Pacific
      as an unknown entity—and some even looked at the company
      as the bad guy.

      “The impact of that [deal] is still being felt to this day,”
      Hornung said, adding that he harbors no regrets.

      “We were there to buy the business. Dealers were
      frustrated with the sequence of events. Schwinn’s
      woes were brought on by Schwinn’s management team.”

      Pacific ate nearly $1 million in warranties resulting from
      the deal, according to Hornung. The company could have
      easily passed the buck onto dealers—even those who
      ceased doing business with Pacific after the deal.

      “We didn’t think that was the right thing to do,” he said.
      “We really cleaned up a lot of messes.”

      Shortly after purchasing Schwinn, Pacific introduced the
      brand into the mass channel and GT into sporting goods.
      Last year, Pacific returned GT strictly to the specialty channel.

      In 2004 Hornung led Pacific through its acquisition by
      Dorel Industries, a Canadian manufacturer of juvenile
      and home furnishings. Hornung called the move a
      “mixed bag.” Because of the additional reporting
      Pacific has to do for Dorel, the company isn’t as
      nimble as it once was.

      The upside is the unlimited financial resources and strong
      network in China, where Dorel has roughly 130 employees.

      Hornung admitted that Pacific’s sales are down, and that
      market share is difficult to grow. But he believes the specialty
      channel in particular offers the company potential growth.

      His leadership and accomplishments at Pacific have not
      gone unnoticed by industry peers. “He is often the topic
      of conversation with many of our mutual industry partners,”
      said Bob Margevicius, executive vice president of product
      group at Specialized. “Chris’s success is attributed to being
      honest, trustworthy, humble and respectful.”

      Hornung won’t have a problem keeping busy—putting
      in time at a non-profit organization that provides health
      care to third-world countries and a startup company
      that conducts human performance testing.

      All Things Northwest in BMX!
      ***** Gene`s BMX *****
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