Scott Sports Group SA had appointed two new co-CEOs following a rather turbulent year in which the group’s majority shareholder, Youngone Corporation, a manufacturer of outdoor apparel and footwear, first made a cash injection into its subsidiary in the form of a CHF 150 million (US$166million / €160 million) loan last December and then dismissed longtime CEO and second-largest shareholder Beat Zaugg back in March.
Juwon Kim was installed as interim CEO at that time, and the company announced today that it would remove the interim tag and elevate vice president Pascal Ducrot to join Kim in a new co-CEO structure backed by a new executive board. These appointments follow a bizarre period where Zaugg contested his dismissal in March this year.
Zaugg’s stretch as CEO of Scott spanned four decades. He was part of a management buyout and installed as CEO in 1998 before becoming a majority shareholder in 2002 and then acquiring a 100% stake in Scott in 2005. Youngone purchased a 50.1% stake in Scott in 2015, with Zaugg staying on as CEO and minority shareholder.
With such a long history with the brand, it’s perhaps no surprise Zaugg didn’t leave quietly, telling Bicycle Retailer & Industry News after his dismissal that he still considered himself CEO and chairman of Scott Corp and Scott Sports Group, claiming Kim’s appointment as his replacement came from Youngone’s PR firm and not Scott’s board of directors and was not valid.
Zaugg also questioned Kim’s ability and experience in navigating the European bike and outdoor market, especially as the cycling industry itself was navigating a significant downturn, those same difficulties that necessitated Youngone’s substantial loan just four months earlier.
Youngone for its part, initiated arbitration proceedings with the International Chamber of Commerce (ICC), alleging “that there has been a material breach of the shareholder’s agreement by Beat Zaugg.”
A power struggle ensued, culminating in yesterday’s announcement by Scott that Kim would assume a permanent position as co-CEO alongside Ducrot, with the Korean and Swiss duo also leading a new executive board. Both are longtime fixtures of the brand.
Kim has been a member of Scott’s board of directors since 2002, overlapping with Zaugg’s time as CEO and majority shareholder, and was more recently head of growth strategy and mergers & acquisitions at Youngone. Ducrot, a former road racing professional, has held various roles at Scott since 1990 when he started as road product manager.
A statement by Scott outlined that the new executive leadership team will lead a transition plan committed to prioritising Scott’s bike business, which accounts for more than 80% of the company’s revenue. That plan will see Scott “increase its investment into the development of world-class products according to its values of Innovation, Technology and Design.” Furthermore, the statement also outlines plans to target growth markets, including e-bikes and urban mobility.
Despite that renewed commitment and focus on its bike segment described as its “core business,” the announcement also references Scott’s plans to put “additional focus” on its apparel and footwear across bike, running, winter and outdoor.
The statement concludes by referencing the leadership team’s commitment to be “proactively engaged in evaluating and growing Scott’s current operations and in supporting the move into the next chapter for Scott.”
Did we do a good job with this story?