Table of contents

• Investors take over motorcycle accessory chains Hein Gericke, Polo and Louis
• “Germany is a great market”
• Warren Buffett is currently the third richest man in the world
• Paul Liao has headed LS2 headquarters since 2007
• Questions to Detlev Louis managing director Joachim Grube-Nagel
• Questions to Polo Managing Director Michael Kern
• Questions to Hein Gericke managing director Paul Liao
• About Louis, Polo and Hein Gericke

Louis

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Investors take over motorcycle accessory chains

Investors take over motorcycle accessory chains
Hein Gericke, Polo and Louis

Hein Gericke has already been sold to foreign investors several times. It was also Polo’s turn. The sale of Louis to US tycoon Warren Buffett recently made headlines. Who are the buyers? What do you want with the accessory chains?

Brigitte Haschek, Michael Schumann

03/19/2015

Even if they cultivate this image and often appear in dire straits: Investors are not Samaritans. They want to earn money with the companies they take over. This also applies to US multibillionaire Warren Buffett, whose holding company Berkshire Hathaway surprisingly bought the healthy Detlev Louis GmbH on February 20. The news initially caused severe irritation among the 1,500 Louis employees. After all, under the sign of bankruptcy, competitor Hein Gericke had been bought up a year earlier and placed under Chinese leadership with LS2. And also polo had to move from bankruptcy into the hands of an investor in 2012.

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Hein Gericke, Polo and Louis

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So what was going on with Louis? In addition, in the excellent economic situation as the German market leader in motorcycle accessories? The ugly word “smashing” made the rounds, the employees were afraid of their jobs. So the Hamburg management decided to take a spontaneous step. For a short time, all Louis employees nationwide were brought together at four locations and received first-hand information.

“Germany is a great market”

The message from the old management was that they will remain the new. And that nothing else will change (see interview). Owner Ute Louis had placed the life’s work of her husband Detlev, who died in autumn 2012, in the hands of US investor legend Warren Buffett. That was all. Few people knew about the deal in advance. For example, the three Hamburg-based Louis managing directors who had found out about it almost three months earlier. According to the global law firm Beiten Burkhardt, it was Ute Louis who approached Buffett’s Holding Berkshire Hathaway with the offer.

There she ran into open doors, because Buffett and his manager were planning a shopping tour in Europe – and here in Germany in particular. “Germany is a great market,” said Buffett to the “Handelsblatt”. Compared to the “Financial Times” he said: “This investment is smaller than our others, but a door opener. We cracked the code for Germany. “

Warren Buffett is currently the third richest man in the world

Buffett’s Holding Berkshire Hathaway goes back to a US textile company that its 84-year-old owner bought in 1965. Detlev Louis Motorradvertriebs GmbH is now in a very exclusive and illustrious group in the holding family: Berkshire is wholly or partly owned by heavyweights such as American Express, Coca-Cola, battery manufacturer Duracell, ketchup manufacturer Heinz, IBM, the globally active Munich reinsurance company , Fruit of the Loom, the Washington Post, and a plethora of companies, insurance companies, and banks primarily active in the United States. In 2014 the holding company had an annual turnover of 194 billion US dollars (approx. 180 billion euros). The 452 million that, according to the “Financial Times”, went to buy Louis, are hardly noticeable. Nor in Buffett’s personal fortune, which the US business magazine “Forbes” currently puts at almost $ 73 billion. According to the Forbes list, he is currently the third richest man in the world. Only Bill Gates and Mexican telecommunications mogul Carlos Slim Helu have a few billion ahead of him.

Warren Buffett became famous for recommending that investors only invest in industries they knew something about. Since that certainly applies to himself most, he seems to believe in the motorcycle industry: in 2009 he helped Harley-Davidson out with $ 303 million when the brand was economically badly hit. The investment has paid off. In 2014 Harley paid back its debts – with 15 percent interest annually.

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Paul Liao has headed LS2 headquarters since 2007

A few leagues below, the Hein Gericke investors around the Chinese businessman Paul Rutian Liao play the broad field of the global accessories market: After studying economics, Paul Liao joined the Chinese helmet company Jiangmen Pengcheng Helmets run by his brother Arthur Liao. The company grew and was set up worldwide by the two brothers with the brand LS2 (stands for Liao’s Systems). Paul Liao and his company Tech Design Team have been running the LS2 headquarters in Barcelona since 2007. The brand sells over a million helmets worldwide every year – and the trend is rising – and has sponsorship agreements with MotoGP riders and the multiple Dakar winners Marc Coma and Cyril Despres. With the takeover and the gradual rebuilding and expansion of the insolvent Gericke chain at the beginning of 2014, LS2 has not only created a second pillar, but also an additional sales channel for its own products.

Shortly before Louis, competitor Polo got a new owner: Equistone Partners Europe bought the accessories chain based in Juchen on January 30th. After the bankruptcy in 2011, Polo was in the hands of a Munich holding company. The parties agreed not to disclose the respective purchase prices. The new polo investor Equistone goes back to the British Barcleys Bank. On its website Equistone gives an insight into the influence the company has on the processes in the companies belonging to it: We “optimize (…) economically, introduce variable cost structures and increase transparency within the company through controlling and risk management systems.” According to Samaritern that doesn’t sound like that. And Buffett and Liao also want to make money with their investment. That they are trying that on the German motorcycle market is a good sign – for the entire industry.

Questions to Detlev Louis managing director Joachim Grube-Nagel

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Joachim Grube-Nagel, Managing Director Detlev Louis.

What changes do you expect due to the new ownership structure or from the new investor?
Warren Buffett carefully acquires only companies that have long been profitable, financially sound, and have proven management. In other words, companies in which no change is necessary.
You can count on different strategies and goals for the future domestic and international business of Detlev Louis?
No. The proven path is to be continued.
Your competitor Hein Gericke has declared to expand beyond the German-speaking area. Do you have appropriate plans?
Our French online shop louis-moto.fr was launched last year, with branches in Switzerland to follow shortly.

What trend do you expect in personnel development in the company? Rule out job cuts in the medium term?
We do not expect a trend or any downsizing. Our company is growing and we will continue to hire the people we need. We currently have over 100 vacancies.
In contrast to Warren Buffett at your company, Hein Gericke investor Liao comes from the motorcycle industry. Isn’t that a competence disadvantage for you??
Our company has developed motorcycle expertise for more than three quarters of a century. This is a competitive advantage that the new owner appreciates and that is one of the reasons why he made a very conscious decision in favor of our company.
You can often find branches of your competitors in the immediate vicinity of you. What are the reasons for going to your shop? To put it the other way round: What do you see as the unique selling point of Detlev Louis??
Above-average and excellently trained, customer-oriented staff is our greatest asset. In addition, there is our wide and deep range of products as well as high availability of goods – the shelves in our shops are full. And ultimately, very fair prices also play a role.

Everything about Louis

To the Online shop “Detlev Louis”

Questions to Polo Managing Director Michael Kern

polo

Michael Kern, Managing Director Polo.

What changes do you expect due to the new ownership structure or from the new investors?
Changes are likely to result from the expected accelerated pace of growth and less in the operational context. Equistone Partners Europe will support the successful course taken by the POLO management and continue it with the current management team.
Expect different strategies and goals for domestic and international business?
We will continue to implement our previous, profitable growth strategy and continue to push it. This is based on the respective market requirements, which can differ internationally. Regardless of the country, our first priority is always to align our services with customer needs and business partners in the target market.
Your competitor Hein Gericke has announced that it will expand beyond the German-speaking area. Do you have appropriate plans?
We have long been in the corresponding expansion phase. However, we are not concerned with rapid growth, but with sustainable growth.

What trend do you expect in personnel development in the company? Rule out job cuts in the medium term?
In a consulting-intensive industry, our employees form the foundation for long-term corporate success. Expansion requires investment, and that applies in particular to the consistent development and advancement of POLO employees. Our employees receive regular training: sales and management qualifications, product and merchandise knowledge, use of IT systems, procedures and processes – to name just a few important keywords.
In contrast to your company, Hein Gericke investor Liao comes from the motorcycle industry. Isn’t that a competence disadvantage for you??
The DNA of a company is made up of its employees, not so much the investor. “Polo … because I ride a motorcycle” – that stands for competence in one of the most passionate industries in Germany. Almost 90 percent of all POLO colleagues actively ride motorcycles and have been with the company for years. More industry expertise is difficult to achieve. The power of Equistone Partners Europe will be based on the branch expansion experience.
You can often find branches of your competitors in the immediate vicinity of you. What are the reasons for going to polo??
We are less concerned with standing out from the competition in a frenzy than with consistently aligning ourselves with the needs of our customers. As a biker, I shop where I feel best at home. The decisive factor is the diversity of the range and the availability of goods, an optimal price-performance ratio and a high level of professionalism on the part of our employees.

To the Online shop “polo”

Everything about polo

Questions to Hein Gericke managing director Paul Liao

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Paul Liao, Managing Director Hein Gericke.

A year ago, Paul Liao, co-owner of the Chinese helmet manufacturer LS2, outlined his strategy for Gericke restructuring in an interview with MOTORRAD (9/2014). Where does the company, which was insolvent in 2013, stand now?

You have put a lot of fresh air and money into the restructuring of Hein Gericke. Is that already bearing fruit??
Yes, of course: Both our internal processes and the range of products have been optimized. We have renovated and modernized many stores. We have opened new Hein Gericke stores in Pfaffenhofen and Grave in the Netherlands. Mannheim and Minden have been extensively renovated. In Minden, the sales area has also grown significantly.
A year ago you issued the slogan of wanting to become number one again in Germany. Where are you now?
We are currently in third place. We are continuing to work on our goals, but are by no means concentrating only on Germany. We have a lot more Europe in mind and, in principle, always think globally in the long term.
Has the range adjustment you intend to carry out has already been completed??
No, this process naturally takes a lot of time and is not yet fully completed. It goes without saying that we are constantly working to offer our customers the best possible product selection.

What does the new product mix look like now??
In addition to our well-known and proven own brands, which we are constantly developing, we have added some additional well-known brands to our range. For example, I would like to mention Arai, Richa or Macna. We have also broadened our position with regard to our technology suppliers.
How has the expansion beyond the German-speaking area that you announced a year ago progressed so far?
On March 1st, our new store opened in Grave, the Netherlands. On April 1st we will celebrate the new opening in Glasgow, and further stores in Great Britain are planned for 2015.
Pursue different strategies and goals for domestic and international business?
No, there are no fundamental differences. Of course, we adapt the range to the local characteristics. In addition, we like to work with local partners in the supply of goods in order to act effectively and efficiently.
You can often find branches of your competitors in the immediate vicinity of you. What are the reasons for going to Hein Gericke??
First and foremost, our range, coupled with exceptional customer service. Almost all Hein Gericke employees are motorcyclists themselves and are therefore very familiar with the subject. Our customers notice this very quickly – and they appreciate the good advice they receive. I would also like to mention our range of services here. What we don’t have in store, we can order. From almost all well-known brand manufacturers on the market. Incidentally, this applies not only to the brands we sell, but also to products and brands from our wholesale partners such as Paaschburg & Wunderlich, Cypac and many others. All well-known exhaust brands can also be easily ordered from Hein Gericke.

To the Online shop “Hein Gericke”

Everything about Hein Gericke

About Louis, Polo and Hein Gericke

MOTORCYCLE, manufacturer

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