(Reuters) – Harley-Davidson Inc (HOG.N) on Friday named a board member hailed for turning across the Puma model’s near-bankrupt enterprise as its interim chief because the motorbike maker gropes for an efficient technique to woo younger prospects and revive gross sales.
Jochen Zeitz was requested to take over after Chief Government Officer Matthew Levatich stepped down following the Milwaukee, Wisconsin-based firm’s worst gross sales efficiency in at the very least 16 years.
Harley-Davidson stated Zeitz will function interim CEO till an exterior search agency helps discover a new chief government.
Michael Uhlarik, founding father of consultancy Bike International, stated Levatich’s exit was anticipated. He stated Harley was doubtless to present Zeitz a long term as he has “confirmed turnaround” expertise.
Zeitz is well-known for reworking the loss-making Puma within the 1990s into one of many world’s prime three sports activities manufacturers.
“It’s not concerning the subsequent quarter or earnings per share,” Uhlarik stated. “They should construct a long-term, multi-year technique.”
Harley has failed for years to extend gross sales in america, its prime market, which accounts for greater than half of its bikes bought. As its tattooed, baby-boomer client base ages, the Milwaukee-based firm is discovering it difficult to draw new prospects.
Levatich, who took the corporate’s reins in Might 2015, guess on new launches, together with of battery-powered bikes, to show across the firm’s fortunes within the home market.
The outcomes, nevertheless, remained elusive.
Harley’s 2019 U.S. bike gross sales have been the bottom in at the very least 16 years. Falling gross sales up to now 12 quarters have compelled the corporate to restrict manufacturing of its bikes to stop worth low cost stress and shield revenue.
In 2019, Harley’s bike cargo quantity in america was the bottom in at the very least 20 years. International shipments have been the bottom since 2010.
With no gross sales revival in sight, buyers have been turning into stressed.
Since Levatich took the helm, Harley’s shares have fallen 46%. By comparability, the S&P 500 Index .SPX has gained 40%.
Falling gross sales have had made Wall Avenue speculate whether or not the corporate, which symbolized the counterculture motion of the 1960s, would search refuge in a buyout or flip personal to remodel its product traces and branding with out the stress from shareholders to protect its revenue margins.
Final month, Levatich tried to parry that query by expressing confidence within the present technique. However he additionally acknowledged that the challenges dealing with Harley have been “important” as its heavy and costly bikes have been competing for “individuals’s scarce time, individuals’s scarce funding and dedication.”
Levatich will help with the transition by way of the top of March, the corporate stated.
On Friday, Harley’s shares closed down 2.2% at $30.47.
