If, in the mid-1920s, you’d told the owners of a recently-opened Portsmouth bike shop that the business would one day be worth £180 million, they’d have laughed you out of the door, before perhaps wondering if Britain was about to suffer Weimaresque levels of hyperinflation. But that’s the valuation today put on Wiggle, which has been acquired by private equity firm Bridgepoint.
Of course, the company that began life in 1920 as Butlers Cycles has long since broken free off its bricks-and-mortar shackles to become one of the retail success stories of the internet age.
By 1999, the shop’s owners, Harvey Jones and Mitch Dall, had decided to move the bicycle accessories catalogue business they were running from the shop online, having presciently reasoned that their mail order customers knew exactly what they wanted, and that the emergence of e-commerce could help speed up the process.
Dall sold his 26 per cent stake in the business in 2009, three years after ISIS Equity Partners had led a £12.3 million refinancing, while Jones retained his shareholding but stepped back from day-to-day involvement.
Current chairman Andy Bond, a keen cyclist who used to run the supermarket chain Asda, and chief executive Humphrey Cobbold, will remain with the business following today’s deal, which comes just weeks after reports that Wiggle was being groomed for a stockmarket flotation in 2012.
Turnover is approaching £90 million this year, following consistently strong growth that last weekend saw it feature for the second year running on the Sunday Times Fast Track 100 list of Britain’s fastest growing private companies.
Both profit and sales growth in recent years have averaged over 50 per cent per annum, a phenomenal achievement given prevailing economic conditions, but one that highlights the resilience of the cycle industry in bucking the general trend that has put retailers in many other sectors in difficulty.
Wiggle now operates in 88 countries worldwide, with its website translated into nine languages and enabling transactions in 15 different currencies.
Cobbold said that Bridgepoint’s record in helping to grow businesses that share a similar profile meant it was the ideal partner to help take Wiggle forward.
“We are delighted to have a new partner and owner in Bridgepoint, and would like to thank ISIS for being a fantastic supporter of Wiggle, its 200 colleagues, suppliers and brands over the past five years. Their investment and involvement has transformed Wiggle into a truly global retail business with best in class execution,” he explained.
“Bridgepoint is highly experienced and successful in investing in growing retail and consumer businesses, and has an extensive international network which matches Wiggle’s international strategy and growth aspirations, and will be a significant benefit to continuing the strong growth.
“Wiggle could not have achieved this growth without the phenomenal commitment and enthusiasm of everyone of our colleagues, and we look forward to working alongside them as we develop the business the next exciting phase of channel and international expansion.”
Bridgepoint partner Vince Gwilliam highlighted the fact that a number of factors were helping to undeprin Wiggle’s growth in a market estimated to be worth £1.4 billion in the UK and £25 billion globally for cycling-related products alone. The retailer also now sells equipment for runners and swimmers.
“Wiggle is benefiting from strong structural market drivers such as the shift to online retailing combined with the trend towards fitness and health living and the increasing popularity of cycling as a pastime,” he said. “In addition, it has had a strong track record of profitable organic growth.”
Born in Scotland, Simon moved to London aged seven and now lives in the Oxfordshire Cotswolds with his miniature schnauzer, Elodie. He fell in love with cycling one Saturday morning in 1994 while living in Italy when Milan-San Remo went past his front door. A daily cycle commuter in London back before riding to work started to boom, he's been news editor at road.cc since 2009. Handily for work, he speaks French and Italian. He doesn't get to ride his Colnago as often as he'd like, and freely admits he's much more adept at cooking than fettling with bikes.