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Brexit, Covid, and economic uncertainty blamed as Wiggle Chain Reaction Cycles records £97 million loss

Overall revenue for the group, which was bought by German retailer Signa Sports United in 2021, also fell by 30 percent to £252 million

The summer of discontent for the cycling industry continues, with news of slumping bike sales coming in the wake of a sobering annual report from Wiggle Chain Reaction Cycles. The online retailer posted a pre-tax loss of over £92 million for 2022, compared to £14.5 million for the previous year, as the company’s former chief finance officer blamed the aftereffects of Covid, Brexit, and ongoing economic uncertainty for the significant drop.

In documents filed at Companies House in late July, Mapil Topco Limited, the group which covers both Wiggle and Chain Reaction’s retail operations, recorded a loss before tax of £97,041,000 for the year up to 30 September 2022, almost seven times greater than the losses sustained in 2021.

Overall sales also fell by 30 percent, from £360 million in 2021 to £252.5 million last year, 38 percent of which was generated outside the UK.

However, Wiggle’s own performance appears slightly less bleak than its parent company, recording losses of £26,841,000, a still-significant drop from the £1.3 million loss reported for the previous year, but which the company claims is “in line with expectations”.

> UK bike sales fall even further after dropping to lowest level in 20 years

In their strategy and business review, the group – which was acquired by Berlin-based online retailer Signa Sports United (SSU) in December 2021 – also noted that UK sales remain seven percent higher than in 2019, the year before the start of the Covid-19 pandemic, and that the proportion of own-brand sales increased from 26 percent to 30 percent during the year.

Capital additions of £14.5 million were also made by the business, mainly focused on improving back office systems, as well as the controversial rebrand of Wiggle and Chain Reaction’s online shops. The group say the heavily criticised updates will “improve the customer experience and therefore conversion and sales”.

Wiggle down

While the current challenging state of the UK economy was blamed for “subduing consumer demand” (UK sales fell by 32 percent compared to 2020 and 2021), the company claimed its drop in international sales of 26 percent was “driven mainly by the full year impact of Brexit reducing sales into the EU, where higher duty and fulfilment costs have necessitated higher pricing”.

The acquisition of Wiggle CRC by Signa Sports United during the period in question also brought “significant one-off legal and professional and staffing costs”, adversely affecting net profit by over £36 million, though SSU also fully repaid and waived all shareholder debt and intercompany loans, amounting to £312 million, as part of the deal.

In a directors’ report submitted by chief finance officer Adrian Bruce, who left the company earlier this year, Mapil Topco Limited said: “The effects of the current economic uncertainty have been felt throughout the retail industry in recent months and the future impact of these uncertainties remains difficult to predict.

“In addition, the Group is suffering from the aftereffects of the Covid pandemic. The pandemic, and the lockdown periods in particular, led to a pull forward of revenue [which] meant that customers who ordinarily purchase regularly have accelerated their purchasing into the lockdown period and have subsequently purchased less in the periods following the lifting of lockdown restrictions.”

Wiggle CRC has been contacted by road.cc for comment.

“If you voted for Brexit, please realise this is 90% because of your decision”: UK cycle distributor FLi ceases trading

Wiggle’s worrying losses are yet another sign of the challenging times for the bike industry. Yesterday, road.cc reported that the Bicycle Association’s latest findings on the state of the UK cycle industry suggest that bike sales have slumped once again, months on from the national trade association reporting they had fallen to a 20-year low in 2022.

The news comes courtesy of the Bicycle Association’s mid-year report for the first half of 2023, which suggests that mechanical bike sales have fallen by eight percent and e-bike sales by 12 percent. Furthermore, the total market value of the cycle industry has dropped by eight per cent compared with the same period last year.

Concerningly, the numbers come from a low starting point, with last year seeing bike sales in the UK dropping to the lowest level in two decades, 27 percent below pre-Covid levels as the cost-of-living crisis gripped.

As Wiggle claimed in their recent report, the implementation of Brexit protocols over the past few years has also had a damaging impact on the industry.

> Ribble Cycles sees "encouraging" improvement in performance after making £5 million loss in 2022

In July, as FLi Distribution ceased trading with immediate effect, the Huddersfield-based distributor’s director blamed the “red tape and barriers to trade” currently affecting businesses for his company’s demise.

FLi – which began life in 2008 as FLi Race Team Management, before transitioning to distribution – was known for supplying KTM bikes to the UK for over a decade, a relationship which ended in April this year.

The distributor notified dealers and suppliers of its decision to cease trading earlier this summer, with director Colin Williams citing the impact of Brexit, the complexities and restrictions surrounding UK and EU trading, and the difficulties facing the bike industry in the post-Covid lockdown period as the main reasons behind FLi’s disappearance.

“If you voted for Brexit, please realise this is 90 percent because of your decision back in 2016,” Williams said. “I have no idea what will be next, but as the people close to me know, whatever it is, it’ll be better than the last 18 months.

“I’m done fighting, I’m done with the red tape and the barriers to trade. It hadn’t been fun for some time, so the time was right to end it now, life is too short. The relief now the decision is made is amazing, but I am so sorry for any negative impacts it will have on anyone and I’m doing my best to resolve any and all of them where I can.”

Issues stemming from Brexit and the post-Covid lockdown purchasing malaise were also cited earlier this month by Ribble as factors behind the company’s £5 million loss in 2022 – though the company encouragingly reported a “strong volume in growth demand of 10 percent” for the first half of 2023, amidst a restructuring process to mitigate risk.

Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.

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44 comments

Avatar
Rik Mayals unde... | 7 months ago
5 likes

I think it will go full circle back to your local bike shop. They're local, reliable, if they have what you want in stock, you can have it in the time it takes to travel there, if not they can usually get it from their suppliers fairly quickly and most importantly, they are an actual human being at the end of the phone line and a friendly face when you walk in. Also, as they want the business and want to stay in business, they will value your custom more than the huge online stores where, to them, you are literally just a customer number.

Who on here cannot say they don't enjoy the smell of butyl, oil and tub glue which hits you when you walk into a bike shop? You never get that from your laptop.

Finally, your LBS will not implore you to leave them a review, and bombard you with emails every single bloody day just because you bought an inner tube from them.

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Off the back | 7 months ago
0 likes

I think more people are moving back to their LBS. When I lived in Harrogate, I had 3 top quality shops to choose from. I would rather spend money there than at Wiggle/CRC. 

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SimoninSpalding replied to Off the back | 7 months ago
0 likes

+1 for Bikemonger who also do really good online

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ooblyboo | 7 months ago
9 likes

The website redesign hardly helped. Such a mess that I go to the likes of Tredz wherever possible these days.

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lio replied to ooblyboo | 7 months ago
3 likes

The new website is RUBBISH.

It's really poorly designed and hard to find things. 
 

I searched for a nee mtb fork the other day. I wanted to search by wheel size, offest and travel. None of thise criteria are available so I'm forced to wade through loads of forks I can't use.

Instead the options are things that either don't matter to me or aren't appropriate for the product. Hint: bike fork's don't have "genders" amd they don't come in sizes of small, medium or large.

It's easier to just go to a different site.

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SimoninSpalding replied to ooblyboo | 7 months ago
1 like

I try not to use Tredz either as they become more and more Halfords

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ktache | 7 months ago
5 likes

Wiggle or CRCs don't seem to pop up in my searches, and if they do, are not anywhere near the cheapest. They used to be my go-to spares retailers.

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NOtotheEU replied to ktache | 7 months ago
1 like

ktache wrote:

Wiggle or CRCs don't seem to pop up in my searches, and if they do, are not anywhere near the cheapest. They used to be my go-to spares retailers.

I don't know when they became the same company but Chain Reaction used to be my go to shop too though i never liked Wiggle at all. Haven't used them for years until recently when they were the only place i could get the right size Bottom Bracket and the seatpost I wanted was on special offer.

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Rik Mayals unde... replied to NOtotheEU | 7 months ago
3 likes

Wiggle bought out CRC, which is the reason why they are in such a state.

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grasen | 7 months ago
6 likes

Brexit, brexit,brexit.

Ok I live in Denmark so I don't care.

I always shop Condor or Vulpine - and guess what, both still send hasle free to me.

If you want to survive then you have to adapt. If Condor and Vulpine can do it then so can anyone else. Stop blaming brexit for everything. And everybody has had Covid so that's no excuse either.

If a company goes down it is bad choices - not bad customers

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MattieKempy replied to grasen | 7 months ago
12 likes

grasen wrote:

Brexit, brexit,brexit.

 Stop blaming brexit for everything. 

I live in Greece but still have family ties to the UK, and Brexit has f*cked my rights in every EU country except Greece and the UK, so I DO care.

Wiggle still send to Greece without fuss and there are no additional fees or complications from Customs, so it's not that big of a deal in that regard.

What really, really pisses me off about Brexit, almost more than the right to free movement thing, is that my parents can't send their grandchildren Christmas and Birthday presents without we have to pay import duty and Customs fees on them. That's hideous.

Brexit has f*cked everything. Please don't insult my intelligence by telling me any different.

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Rik Mayals unde... replied to MattieKempy | 7 months ago
5 likes

Well, We travel to Switzerlnd regularly, and we order goods from there too. They have never been in the EU, we have never found having stuff delivered to be an issue at all. I do wonder if all these issues are merely sour grapes, and other countries making it difficult for the UK to punish us for leaving.

I am not being funny, but I genuinely wonder why it is so difficult when it isn't when dealing with other countries.

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ktache replied to Rik Mayals underpants | 7 months ago
9 likes

I believe Switzerland gets on with the EU, and doesn't make life far more difficult for itself by sending ideological idiots to do the negotiations, whilst lacking preparation and believing it will be the easiest deal ever.

Then the Swiss actually believe in the complex deal they made and stand by it and the rules they negotiated.

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BIRMINGHAMisaDUMP replied to Rik Mayals underpants | 7 months ago
9 likes

Switzerland is in the single market and the customs union.  If you look back most of the brexthickers said leaving the EU would 'change nothing'. Their ignorance was matched only by their lies. There is no malice - and no sour grapes.  Membership of the EU reduces bureaucracy and red tape.  Brexthick increase friction. 

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David9694 replied to Rik Mayals underpants | 7 months ago
7 likes

We've crashed out of the EU in about the most beligerant way possible. Our ex partners have been remarkably tolerant - the "punishing" thing is a Brexiter myth - part of the UK's agenda is/was to try to have our cake and eat it, which they are not going to stand for. 

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Eton Rifle replied to Rik Mayals underpants | 7 months ago
7 likes

Switzerland is in the Single Market without being an EU member. It pays handsomely for this, whilst being in a constant state of negotiation with the EU. The UK, being run by Tory idiots, has no capability to emulate this.

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grOg replied to Rik Mayals underpants | 7 months ago
1 like

Good point; I'm in Australia and have no issues buying from either the U.K. or E.U.; that said, I haven't bought from CRC since Wiggle bought them and changed the terms of sale, which raised costs significantly.

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BIRMINGHAMisaDUMP replied to MattieKempy | 7 months ago
3 likes

We live in France. Recently I moved a bike from London to Paris.  The hassle was tremendous. Usually you just put the bike on Eurostar and that was it. Now it has to be dismantled, boxed (certain size only) sent through customs, collected at the other end in person and accompanied in person. All of this cost time and equipment.  Imagine doing that daily exporting goods. The extra friction is crippling for small business. Luckily we all have EU passports so we have freedom of movement  but getting stuff out of the Unicorn Kingdom is now restricted. 

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BIRMINGHAMisaDUMP replied to grasen | 7 months ago
7 likes

Funny isn't it. If brexthick had even been a tiny, tiny bit of a success those who supported it would be waving their little brexit flags daily.  But it's a total failure (as predicted) so of course they don't want to talk about it. The negative impact of brexthick is evident - as those who do business have attested. 

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Sriracha | 7 months ago
5 likes

I've never heard a CEO credit the business environment for their success, so I'm wary when they pass on the blame when they fail.

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bike.brain | 7 months ago
3 likes

Losses couldn't possibly be down to poor customer service could it? I had a disagreement with their CS years ago and haven't used them since.

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Flintshire Boy replied to bike.brain | 7 months ago
5 likes

.

And the website 'improvement' fiasco can hardly have helped.

.

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Laurian | 7 months ago
7 likes

If you thought Wiggle was bad, don't go on Planet X. The site used to simple, now it has some sort of late 90s cyberpunk asethetic made up on neon colours and bizarre text placement and misplaced/semi-off screen product photos. Not to mention the banner that suffocates the main page.

It's an assault on the eyes. Wiggle is not as bad as that.

But yeah Brexit sucks. I wanted some Bikester products but that European based site just tells you to go to their UK based partner site Wiggle to find the goods. Or it did last month when I tried to use their site. Used to be able to order from them easily. Except their stocks don't match and they have very different products available.

Brexiteers have economically and internationally handicapped this country. It's a real shame.

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mrchrispy | 7 months ago
3 likes

agreed, the website is now a car crash. 

stopped using them after the update.

merlin/sigma and (annoyingly) amazon seem to have most things covered. 

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Flintshire Boy replied to mrchrispy | 7 months ago
0 likes

.

Why do you find it annoying that Amazon (among others) 'seems to have most things covered'?

.

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hawkinspeter replied to Flintshire Boy | 7 months ago
16 likes

Flintshire Boy wrote:

Why do you find it annoying that Amazon (among others) 'seems to have most things covered'?

I'd guess it's something to do with Jeff Bezos playing around with space travel whilst exploiting his employees so much that they have to piss in bottles rather than taking a toilet break.

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Ride On replied to mrchrispy | 7 months ago
0 likes

Merlin is my online shop of choice. If they have it in stock it will be reasonably priced.

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JMcL_Ireland | 7 months ago
10 likes

Reading through this and link story about 2021 takeover (I'm so disengaged with them at this stage I must admit this had passed me by) makes for a familiar round of company down the drain buzzword bingo - private equity, billioaire owner, New York stock exchange.....

I regularly bought from both CRC and Wiggle when they were separate entities. Their prices were competitive and delivery (to Ireland from CRC especially) excellent. They merge, prices go up (hello private equity - let's sweat the assets), delivery goes to s**t as fulfillment is mostly from the UK and they switch from An Post to the most useless courier company in the country who are known for deliveries disappearing. Thanks to B#&*$t the range that can be delivered to the EU has a slash-hook taken to it.

Having a quick look at my order history (from GMail archives rather than account as the morons wiped it), I've ordered from them twice in the last 5 years

So with all the above, colour me not one bit surprised they're shipping losses

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stonojnr | 7 months ago
9 likes

And I thought it was just because they stopped selling stuff I wanted anymore, and the loss of free haribo of course, and the reliance on Evri to deliver stuff into blackholes.

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EddyBerckx replied to stonojnr | 7 months ago
1 like

stonojnr wrote:

And I thought it was just because they stopped selling stuff I wanted anymore, and the loss of free haribo of course, and the reliance on Evri to deliver stuff into blackholes.

Nah, you still get free haribo!!

The new site filters (or lack of) is a joke considering how much time they've now had to fix them. Due to Wiggle+ (free next day delivery for £20 per year) I perserve with them using the search text box normally...but many customers would find it impossible to find stuff using the nav and filters

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