American Motorcycle Dealer AMD 230 September 2018 - Page 27

“WE ARE EVERYWHERE, THE SHOPS ARE NOT” As J&P Cycles approaches its 40th anniversary year in 2019, company President Zach Parham gives his first interview since its parent company emerged from its reorganization filing. He says that business for the world’s largest parts and accessories retailer is “bigger, better and faster” than ever, but his remarks about the changing nature of the market have proven prescient – coming before our recent series on the Community Garage movement, and before Harley’s “More Roads” strategic vision addressed the issue of urban dwelling riders… When J&P Cycles’ parent company MAG (Motorsports Aftermarket Group) filed for reorganization in the bankruptcy court in November last year, the news sent shockwaves around the market. The primary focus in most of the industry responses was on the impact it would have on industry distributor Tucker Rocky (now re-branded as Tucker) and the well-known brand subsidiaries in the group such as Vance & Hines, Performance Machine, Kuryakyn and others. The concern also centered, quite rightly, around the impact on independent vendors that sold to Tucker, ‘we had our best ever May’ Zach Parham, President of J&P Cycles, and son of founders John and Jill Parham Zach Parham, President of J&P Cycles, ‘walks the walk’ and is ideally placed to steer J&P in the direction of ‘new gen’ consumers. He did a 3,500 mile round trip to Sturgis on a BMW R nineT www.AMDchampionship.com and especially the dozens of smaller, typically specialist vendors, for whom the potential hit could be devastating. By the time MAG emerged from the filing in April this year most of the money owed to vendors (over 90 percent) had been paid, but there still were many smaller specialists for whom the unpaid debt remained a major setback. The fact that Federal filing regulations prevent any business in such circumstances from repaying all monies owed was of little comfort to those specialists that were left, and still are, struggling with fall-out. Through the entire saga though, there was one “business unit” in the MAG portfolio that didn’t come into the spotlight quite so intensively, which, given that technically speaking J&P Cycles is the world’s largest motorcycle parts and accessory retailer and a major customer for a large proportion of industry vendors, including those smaller specialists, was a surprise. The primary reason was that while the turnover and business model of MAG’s other foray into retail channel ownership hasn’t worked out (Motorcycle Superstore, bought by MAG in 2012), J&P, as a business, had the ‘hinterland’, footprint, heritage and control over its ‘traffic’ to largely resist the decline in industry sales. ‘we are a retailer, not a distributor’ The decline that started a decade ago with the effects of the 2008 financial crisis and after a brief 24 months of growth three years later, continued in the 48 months following Lacy Diversified’s acquisition of MAG in 2014, and through the recent filing process. AMERICAN MOTORCYCLE DEALER - SEPTEMBER 2018 27 “WE ARE EVERYWHERE, THE SHOPS ARE NOT” As J&P Cycles approaches its 40th anniversary year in 2019, company President Zach Parham gives his first interview since its parent company emerged from its reorganization filing. He says that business for the world’s largest parts and accessories retailer is “bigger, better and faster” than ever, but his remarks about the changing nature of the market have proven prescient – coming before our recent series on the Community Garage movement, and before Harley’s “More Roads” strategic vision addressed the issue of urban dwelling riders… hen J&P Cycles’ parent company MAG (Motorsports Aftermarket Group) filed for reorganization in the bankruptcy court in November last year, the news sent shockwaves around the market. The primary focus in most of the industry responses was on the impact it would have on industry distributor Tucker Rocky (now re-branded as Tucker) and the well-known brand subsidiaries in the group such as Vance & Hines, Performance Machine, Kuryakyn and others. The concern also centered, quite rightly, around the impact on independent vendors that sold to Tucker, W ‘we had our best ever May’ Zach Parham, President of J&P Cycles, and son of founders John and Jill Parham Zach Parham, President of J&P Cycles, ‘walks the walk’ and is ideally placed to steer J&P in the direction of ‘new gen’ consumers. He did a 3,500 mile round trip to Sturgis on a BMW R nineT www.AMDchampionship.com and especially the dozens of smaller, typically specialist vendors, for whom the potential hit could be devastating. By the time MAG emerged from the filing in April this year most of the money owed to vendors (over 90 percent) had been paid, but there still were many smaller specialists for whom the unpaid debt remained a major setback. The fact that Federal filing regulations prevent any business in such circumstances from repaying all monies owed was of little comfort to those specialists that were left, and still are, struggling with fall-out. Through the entire saga though, there was one “business unit” in the MAG portfolio that didn’t come into the spotlight quite so intensively, which, given that technically speaking J&P Cycles is the world’s largest motorcycle parts and accessory retailer and a major customer for a large proportion of indus G'fVF'26VFrF6R6W"7V6Ɨ7G2v27W'&6RFR&'&V6v2FBvRFRGW&fW"@'W6W72FVb~( 2FW"f&F&WF6VvW'66( Bv&VBWBF&76P7WW'7F&R&VvB'r#"e2'W6W72BFR( FW&N( fG&BW&FvR@6G&fW"G2( G&ff>( F&vVǒ&W67BFRFV6ƖRখGW7G'6W2( vR&R&WFW"BF7G&'WF.( FRFV6ƖRFB7F'FVBFV6FRvvFFRVffV7G0bFR#f67&62BgFW"'&Vb#BF0bw&wFF&VRV'2FW"6FVVBFRCF2fvr7FfW'6fVN( 27V6F`r#BBF&VvFR&V6VBfƖr&6W72U$4D$54RDTU"4UDT$U"##