Cosco/Schwinn transition from consumer products to DME

Monday, January 31, 2005

TORONTO - Dorel Industries, a $1.25 billion company better known for Schwinn brand bicycles and its Cosco car seats for kids, is stepping into the HME industry with plans to build a sales base of $25 million annually within three years.

To signal its ambitions, Dorel reserved a 20-by-30 booth at last fall’s Medtrdae show, the second largest swath of booth space for any first-time exhibitor last year. Dorel is showcasing 80 new products in the mobility, bath aids and caregiver equipment categories and since the show has added another 13 products to its offering.

“Buyers come to us all the time and say that’s good but can you give this to me as well,” said product manager Brad Gale. “Our product line has grown more than we showed in October.”

Even as the industry faces its greatest legislative and regulatory challenges in a decade, Dorel is confident it can compete as a newcomer, especially since the bulk of its business is in retail.

“We’re already in high liability businesses, so we understand how to run this and insure for this,” said Gale. “We’re not scared because we own the sources (of manufacturing). We know we can be price competitive.”

Rubbermaid was the last significant foray into the HME market by a consumer products company. In the mid-1990s, Rubbermaid acquired Carex, one of the oldest brand names in HME products. But in mid-2002, Rubbermaid quit the business and sold its Carex business to Apex Medical.

“Rubbermaid thought it would own the bathroom the way they own the kitchen,” said Jack Evans, a retail / marketing consultant at Global Media Marketing in Malibu, Calif. “They thought they would do volume the way they did in the kitchen, but they didn’t realize this isn’t a mass-market market yet. We don’t have the volume.”

In December, Dorel hired Jeff Zartman as its national sales manager for the Cosco Ability Care Essentials line. He worked most recently as a vice president at SaniServ Corporation in Indianapolis.

Zartman will manage about 50 reps in six rep groups across the country.