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Wiggle making “considerable trading profit” with administrators “optimistic” over sale of business

Update filed at Companies House says trading at online retailer “has been very positive”

Wiggle’s administrators say that they are “optimistic” that the business will be sold, and have revealed that since the business entered administration in October, trading has been “very positive” resulting in a “considerable trading profit.”

Alex Massey and Anthony Wright of insolvency specialists FRP Advisory Trading were appointed on 18 October this year as joint administrators of the business, which had been acquired by Germany-based Signa Sports Holding (SSH) in 2021.

Wiggle, already facing the challenge of tougher market conditions after the end of the pandemic-driven cycling boom, had been plunged into financial crisis shortly before entering administration after the withdrawal of previously committed funding of €150 million to SSH, intended to provide operational finance to its subsidiaries, by SSH’s owner, Signa Holding.

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In a Notice of Administrators’ Proposals dated 15 December and published yesterday on the Companies House website, the administrators said that following their appointment and assessment of the company’s financial situation, it was agreed following consultation with management “that the best course of action was to continue to trade the business while a buyer was sought.”

Wiggle’s entry into administration came in the weeks leading up to Black Friday, a crucial trading period for online retailers, and one in which the business was highly visible with a wide range of products on sale at deep discounts.

According to the Notice of Administrators’ Proposals, “trading has been very positive during the administration process with a considerable trading profit achieved.” The administrators added that they had “taken the opportunity to augment stock held within the business with opportunistic purchases to generate additional website traffic and profits.”

The positive trading result in the weeks since Wiggle entered administration suggests that far from being akin to a so-called fire sale, in which a business discounts all stock at a loss simply to shift it – and which may indeed have been the case for some products – across its whole operation, Wiggle managed to achieve a positive operating margin, ie the profit generated as a percentage of turnover.

Deep discounting has continued beyond Black Friday, with Wiggle’s website currently promoting an “Epic Winter Sale” with up to 70 per cent savings on offer.

In an Appendix to the Notice of Administrators’ Proposals, it is revealed that according to the company’s latest management accounts, in the 12 months to September 2023 – the month before Wiggle entered administration – turnover was £204.2 million, down 17.4 per cent on the previous year. Gross profit stood at £45.4 million, but a net loss of £42.6 million was recorded.

A separate Appendix contains an extract from Wiggle’s income and expenditure account for the period 24 October 2023 – a week after it entered administration – to 12 December. Income for that period is stated as £19.7 million, with expenditure of £9.5 million, resulting in a positive balance of £10.2 million.

So far as the potential sale of the business is concerned, the administrators confirmed that initially, details were circulated to 58 parties following a marketing exercise conducted by FRP Advisory’s corporate finance team, as well as approaches received after their appointment had been reported in the media.

An independent valuation of the company has been completed, although the results are being withheld while the sale process continues, with 24 interested parties, seven of which have met at least once with Wiggle’s  management team, signing non-disclosure agreements enabling them to access confidential financial statements and other information.

The administrators, who recently confirmed that Wiggle’s future strategy will see it focus exclusively on the UK with dedicated websites serving specific overseas markets closed down, said that the deadline for fully funded offers to be submitted was 4 December.

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“Given the sale process is ongoing, it is not appropriate to provide further details at this stage and all creditors will be updated in our first progress report,” they added, saying that while they “are optimistic that a transaction will be completed the timescales depend upon due diligence and negotiations.”

Some staffing cuts have been made, however. At the date of the administrators’ appointment, Wiggle had 447 employees at its head office in Portsmouth and distribution centre in Wolverhampton, but the Notice of Proposals confirms that “in order to maintain operations it was unfortunately necessary to implement two rounds of redundancies that have affected a total of 77 employees.”

Simon joined as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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muhasib | 5 months ago
1 like

There's a jumble sale aspect to their current trading as I've noticed prices go down, up and back down on certain items I was thinking of buying as well as saying items are in stock and then not in your size as a result of their useless search filters, I've given up and will wait for the next megasale no doubt starting boxing day

stonojnr replied to muhasib | 5 months ago

Yes I saw they had Le Col jersey, rrp £135, Wiggle price £6.75, a 95% discount, of course as soon as you try to basket it, it's out of stock, bizarrely then claiming stock expected soon.

I think not at those prices, and I don't think Wiggle are sustainable with that much discounting

Jimmy Ray Will | 5 months ago

I guess it's easier to make profit when you are not paying your bills, hey?

When wiggle is sold (and it surely will be sold) and rises again like the proverbial phoenix from the flames, what will all the unpaid suppliers do?

I'm guessing the important suppliers will be reimbursed, but what about everyone else? Will they start trading with wiggle again and simply write off their losses, or will they take a stand against such blatant capitalist shenanigans? 

I am hoping the industry steps up and sticks two fingers up to the gits!

Chrissk | 5 months ago

So trading is up in the three months before Christmas? That's an astounding success.

fwhite181 | 5 months ago

Sounds like an unsustainable basis for an 'operating profit', they're more discounted than PlanetX, the Sports Direct of cycling. As the comments already show, people are buying stuff they wouldn't normally because it's way below RRP. It seems that unless the new owner changes the model/improves the offering to attract new customers, they're not going to be magically profitable when they stop being the cheapest place on the internet for bike stuff.

And please for the love of all that is holy bring back the old website. If I'm looking at a section for 'arm and leg warmers', let me filter by 'arm' and 'leg'. (See also: front and rear lights, tyres and tubes etc....had the devs building the new site ever tried to shop for bike bits? Maybe they could look at SJS Cycles' website for a masterclass in useful filters.)

kil0ran | 5 months ago

The discounting has been truly epic, particularly on their own brand gear. Carbon Prime wheelsets for £300, mag trainer for a tenner, £200 of tools for £40, Vitus/Nukeproof bikes with 60% off etc. Meant I did a Wiggle order (well, CRC) for the first time in over a year.

Geoff Ingram replied to kil0ran | 5 months ago

Except for foreign buyers, unfortunately, as the discount is practically negligable if you buy from Europe. Can't imagine why.

MattieKempy replied to Geoff Ingram | 5 months ago
1 like

Geoff Ingram wrote:

Except for foreign buyers, unfortunately, as the discount is practically negligable if you buy from Europe. Can't imagine why.

Except now, due to the dual delights of f*cking Brexit and Wiggle's financial precariousness, they have abandoned the expats among us who stuck by them for years and years. You might be able to tell that I'm disappointed.

MattieKempy replied to MattieKempy | 5 months ago

Though I did just pick up a POC Ventral Light for less than 40 bucks. Just need to wait for my next visit to the UK to collect it.

mark1a replied to kil0ran | 5 months ago

You're right, I've had some bargains, and not just the own brand stuff, amongst other items, I got a pair of Shimano MT-800 centre lock discs for £14 each. 

I really hope a new buyer can be found, retain the remaining staff and distribution infrastructure, and bring it back. Oh, and spin up the old website too. 

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