Andy Rihs: I will not sell BMC

In a wide-ranging interview with Swiss broadsheet SonntagsZeitung , BMC owner Andy Rihs also says there is no better marketing machine than pro cycling and describes Floyd Landis positive doping test in the Tour de France as the worst moment in his life.

Andy Rihs with now-retired Tour de France winner Cadel Evans, holding a press conference at Eurobike, 2011

In the article published last month, the Swiss entrepreneur, aged 72, revealed he was stepping down as Board Chairman at Sonova Holding AG the world s largest hearing aid manufacturer, which began as Zurich-based AG f r Elektroakustik in 1947. The company was bought out by Ernst Rihs in 1965, with his sons Andy and Hans-Ueli both joining the organisation renamed to Phonak within the two years that followed. After their father died in 1980, both Andy and Hans, together with another original partner Beda Diethelm, continued to make significant technological and commercial advances in the field of cochlear implants.

A savvy, if not somewhat emotional, investor, Rihs also made significant personal investments outside the Phonak realm. In 1998, he became a shareholder in Grenchen-based bicycle company BMC . Determined to find new ways to grow Phonak s market share internationally, Rihs looked to professional cycling as his choice of marketing vehicle. At the dawn of the new millenium, he bought BMC outright and launched the Phonak Cycling Team (with the slogan We race for better hearing ). The strategy worked; Rihs would later reveal that, in Germany alone, consumer awareness of the Phonak brand grew from 20 70% in the six years the team was alive.

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In 2006, Phonak team captain Floyd Landis on BMC s newly-released Promachine SLC01 rode to victory in the Tour de France. After retrospectively testing positive for testosterone four days later, Landis fell from grace and Rihs moved quickly to disband the team. In SZ, Rihs reflected on this as the worst moment in his life even worse than divorce and allegations in 2011 of insider trading within the global enterprise of which he was Board Chairman. We fell from heaven to earth, Rihs is quoted as saying. That was the saddest moment for me, worse than anything else .

Phonak s parent company, Phonak Holding AG, was renamed Sonova Holding AG in 2007. Rihs continued in his role as Chairman until announcing his resignation in May this year, having gradually reduced his stake in the company at one time, as high as 25% to 4.8%. His personal wealth enabled massive and diverse investments vineyards in New Zealand and France, an automated carbon-fibre frame manufacturing facility in Grenchen, more bicycle companies, a velodrome, a football stadium complete with its very-own football team which ranged from money-sucking failures (the Impec frame-making project which today is all but dead) to sustainable and successful enterprises; such as his vineyard in Provence, from which he wants to produce the best wines in the world.

Sport, but particularly cycling and football, has continued to be an out-and-out passion for Rihs, who says he still manages to squeeze in between 8 000-10 000 kilometres on the bike per year. Though he argues when you invest CHF1 (in professional cycling) you get ten- to twenty-times the advertising effect football is by far not as productive , both sporting codes have seen him haemorrhage money over the years. He has been trying to sell the cash-hungry Stade de Suisse for a few years still with no buyer in sight, the round-ball venture has fleeced Andy and brother Hans of a few million and the acquisition of Swiss e-Bike brand Stromer in 2011 also resulted in BMC Group (parent company of the BMC and Bergamont brands) investing disproportionately to keep the capital-intensive company afloat. Stromer is now for sale.

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What is clear from the SZ article is that Rihs has no intention of selling his first love BMC. When pointed out by SZ that he could have been five-times richer had he not reduced his share in Sonova before selling out, Rihs replies that does not interest me. My goal is life; to live and do things. How much money can you take into the sky? If the article is anything to go by, current BMC employees may well receive options to become custodians of Rihs two-wheeled legacy.

Disclosure: the author was an employee of BMC Switzerland from 2008 2011.

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