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Wiggle Chain Reaction put up for sale by administrators, as expert warns collapse is “just the start of big changes” across bike industry

The retail giant, whose parent company found out last week that it can no longer rely on €150 million of previously committed funding, has said all orders “will continue to be delivered as usual”

Wiggle Chain Reaction has confirmed that it is entering administration, with the company now up for sale, following weeks of speculation about the beleaguered retail giant’s future amid a funding crisis for its parent company and reports of cancelled orders and payments to suppliers.

In a statement released today, Wiggle Limited said that the affairs, business, and property of the company are now being managed by joint administrators Anthony John Wright and Alastair Rex Massey of FRP Advisory, a corporate advisory and restructuring firm.

However, the company has also said that “all orders made with Wiggle will continue to be delivered as usual, and our standard terms and conditions still apply for item returns and warranty claims”.

The joint administrators have also confirmed that the Wiggle CRC brand will be put up for sale, while subsidiaries Chain Reaction and distributor Hotlines will enter administration imminently.

“Wiggle CRC, the online sports retail group, is set to be put up for sale following the appointment of Joint Administrators,” the administrators said in a statement today.

“Alastair Massey and Tony Wright of specialist business advisory firm FRP were appointed to Mapil Midco 1 Limited and Wiggle Limited on 25th October 2023.

“A group of subsidiary companies that form the remainder of Wiggle CRC, including Chain Reaction Cycles Limited, Chain Reaction Cycles Retail Limited, and Hotlines Europe Limited, are expected to be placed into administration imminently.

“We’d like to reassure customers that all operations are running as normal, including the websites and online sales of Wiggle.com, ChainReactionCycles.com, and Hotlines-UK.com. Customer service support is live and can be contacted with any queries through the respective websites.”

> What the hell is going on in the bike industry? Wiggle Chain Reaction turmoil discussed

The appointment of administrators marks the rather inevitable culmination of a tumultuous month for Wiggle Chain Reaction Cycles.

At the start of September, Wiggle CRC announced a pre-tax loss of £97 million for 2022, a significant drop from the previous year blamed on the after-effects of the Covid pandemic, Brexit, and the ongoing economic uncertainty within the bike industry.

Then, earlier this month, the cycling and outdoor retailer’s parent company, Signa Sports United (SSU), confirmed that it was suffering “severe liquidity and profitability challenges” amid the delisting of its shares and what it described as the “unjustified” withdrawal of €150 million in previously guaranteed funding from its own owner.

That sudden shortfall in funding sparked rumours last week that Wiggle CRC itself was heading towards administration and that the company had stopped paying its suppliers, while Berlin-based SSU – which also owns Bikester and Probikeshop – prepared to make insolvency filings for its subsidiaries and closed its offices in the United States.

> “I hope anyone who bought recently used a credit card”: Black Friday begins at Wiggle Chain Reaction Cycles… but is it safe to spend with the troubled retail giant?

While Wiggle Chain Reaction’s confirmation today that it has appointed administrators marks the latest in an increasingly long line of events associated with SSU’s troubles, the news itself promises to cause serious ripples across the cycling industry.

“Now that we see that an asset sale or restructuring is in process, Wiggle’s collapse is clearly a very large brick that’s been thrown into the millpond,” industry stalwart and the founder of new agency Greenleaves Cycling, Rory Hitchens, told road.cc this morning.

“Which businesses in the supply chain selling to WCRC will survive or suffer the most, such as the UK distributors selling to WCRC (who has or had too many eggs in the one basket), vendors making Wiggle branded products (such as Lifeline), or vendors making own brand bikes and components for CRC (the likes of NukeProof, Vitus, and Prime)?”

Hitchens continued: “Also what happens to Hotlines [the UK distributor also put up for sale by the administrators]? Where does that leave brands exclusively distributed by Hotlines? I would not expect any distributor in the UK is either in a position to, or wants to, add brands to their portfolios right now.

“The Wiggle Chain Reaction Cycles collapse is just the start of big changes that have to play out,” Hitchens concluded.

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

In any case, the retailer’s collapse comes during an extremely challenging year for the cycling industry in the UK, one which has seen bike sales slump once again, according to the Bicycle Association’s latest findings, which came just months after the national trade association reported they had fallen to a 20-year low in 2022.

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

In May, Livingston-based distributor 2pure also entered administration, just months after the company announced that it was restructuring to focus solely on the cycling industry, following what it described as a “highly volatile” 2022 caused by macro-economic events in the wake of the Covid-19 pandemic and Russia’s invasion of Ukraine.

And in March, Moore Large, the leading UK distributor for well-known brands such as Tern Bicycles, Lake, Forme, ETC, Emmelle, and MeThree, entered liquidation, leading to its £35 million product inventory being auctioned off.

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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25 comments

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Spangly Shiny | 8 months ago
0 likes

Stopped buying from WiggleCRC after I discovered that Herpes, now Evri is their preferred carrier. I wonfer how much business that decision cost them?

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Rik Mayals unde... | 8 months ago
4 likes

To be brutally honest I don't have much sympathy for the company. They set out to undercut everyone else and put other businesses and local bike shops out of business. And it has backfired on them. I do feel sorry for the staff.

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Pot00000000 | 8 months ago
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That 97 million loss is a staggering amount of money. 

How the hell can they balls up so massively that they dump 97 million in a year?

They went from having nothing in stock during Covid, which was understandable,  to just being a really bad online store from 2022-2023. 
 

Still, 97 million for a company who pretty much had the whole of the UK maket sewn up and huge penetration in other areas like Aus and the US.

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Brauchsel replied to Pot00000000 | 8 months ago
2 likes

Without having looked at the books, if the company either had a lot of floating-rate debt or debt that matured and needed refinancing then the return to a normal-ish interest rate environment could easily make up a lot of that loss. 

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stonojnr replied to Brauchsel | 8 months ago
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1/3rd of it was costs related to Signas takeover, they spent 14million on systems efficiencies alone, the rest I think is just they weren't as profitable as maybe we thought.

Signa settled alot of existing debts in the takeover and provided funding via loans but that shouldn't have been an issue in itself for a business trading well. For all the stuff about covid their UK sales were quoted as higher than pre covid, and they still made a loss.

And they're still sending out emails encouraging you to buy stuff, with no mention of the administration part.

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richliv replied to stonojnr | 7 months ago
1 like

I bought something from Wiggle last week (on credit card), it arrived without issue. So for now, they are functioning.

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Secret_squirrel | 8 months ago
1 like

Not particularly impressed by the "Industry Expert".  Everyone he highlighted apart from Lifeline AFAIK is part of the Signa Sports group - so of course they are in the same boat.

Im pretty sure Lifeline are/were just a brand of a Chinese/Taiwanese high volume producer or OEM rebadger.  Its pretty easy to find most of their stuff under different names.

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huntswheelers replied to Secret_squirrel | 8 months ago
1 like

A lot of lifeline is sold as "Trivio" and other brands as you say ...even seen the air blast track pump with a big cycle name on it....  we wait and see what comes of Wiggle... but I'd say it'll carry on in some form or another.

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boardmanrider | 8 months ago
4 likes

The impact of CRC potentially closing will be felt in Belfast in more ways than one. I have it on good authority that the orders sent from the distribution center in Northern Ireland accounts for well ove 25% of the total deliveries managed by Royal Mail and carriers. Its concievable that this could lead to job cuts there.

On a different note it would be sad to to see Vitus go under; a company with a such a great history that helped the likes of Sean Kelly to many victories.

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Jogle replied to boardmanrider | 8 months ago
2 likes
boardmanrider wrote:

The impact of CRC potentially closing will be felt in Belfast in more ways than one. I have it on good authority that the orders sent from the distribution center in Northern Ireland accounts for well ove 25% of the total deliveries managed by Royal Mail and carriers. Its concievable that this could lead to job cuts there.

Wiggle and CRC combined their distribution centre to Wolverhampton many years ago (Wikipedia says 2017).

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Secret_squirrel | 8 months ago
1 like

Worth bearing in mind this all might have been avoidable if the Ego driven expansion of Signa  by Rene Benko hadn't have happened.

https://en.wikipedia.org/wiki/Signa_Holding

Seem he over extended himself in a field he wasnt familiar with. 

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RoubaixCube | 8 months ago
9 likes

I wonder how much money they could have saved or earned in profit if they didnt touch their website design/layout.

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rumlad | 8 months ago
4 likes

Sad times indeed, thoughts are with all the employees there, such an uncertain position to be in. Clearly the market is against WiggleCRC right now, they are owned by a bad parent company, and managment have made some mistakes recently that havent helped (poor new website mainly).

But out of this whole situation its very likely they will find a much better new owner, who will do a much better job of turning the business around. WiggleCRC is a modern and lean online retailer with some really good brands that they own outright, so huge amount of value in a company like that. Good luck to everyone there in the next few months, and hopefully the bike industry makes a comback soon!

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stonojnr replied to rumlad | 8 months ago
2 likes

Well the rumours were Mike Ashley was keen on buying them, at a knock down price, so the jury may be out on them finding a better owner yet.

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rumlad replied to stonojnr | 8 months ago
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I'm sure Ashley (and many others) will be looking at Wiggle right now. I dont like his sports shops, but you can't deny hes very sucessful at what he does. Frasers have a tonne of cash and would easily be able to keep WiggleCRC going in the meantime. Anyone would be a far better owner than current parent company SSU right now, who are effectivley going bankrupt.

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brooksby replied to rumlad | 8 months ago
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rumlad wrote:

but you can't deny hes very sucessful at what he does.

Peeling the very flesh off a dying brand so he can sell it on.

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rumlad replied to brooksby | 8 months ago
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haha yeah hes very sucessful at doing that. To be fair though he never really sells anything on, he just buys and adds to his long list of "assets"

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brooksby replied to rumlad | 8 months ago
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rumlad wrote:

haha yeah hes very sucessful at doing that. To be fair though he never really sells anything on, he just buys and adds to his long list of "assets"

You mean he adds their technological and cultural distinctiveness to his own?  3

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mark1a replied to rumlad | 8 months ago
7 likes

It could go a number of ways if Frasers Group rake over the ashes and pick up what's left. Hopefully they'll realise that there's a state of the art distribution centre at WiggleCRC and not roll it into Evans & Sports Direct. If they leave things as they are (other than rolling back to the old website) and can balance the books, I'd be happy.

There used to be a brilliant bike shop not far from me. Not quite LBS as it was 28 miles away, but it was a destination shop several times a year, due to massive floor space, cafe area, great brands, shoe fitting, bike fitting, and even had a resistance pool for testing wetsuits (triathlon not my bag but good for those that do it). It was called TriUK in Yeovil. It was sold to Ashley and initially for a few years, run at arms length, in fact they went on to replicate the format and open other TriUK stores in other parts of the country. So far so good.

Then they acquired Evans, and thought it would be good to roll TriUK into that (they're just bikes shops right?) Nothing you wanted in stock, a problematic install of the House of Fraser stock & EPOS system which meant that the price you thought you were going to pay will have changed by the time the item was scanned - assuming that the system recognised the barcode in the first place. Once they finished ruining Evans, the assimilation of TriUK started. The place that once sold custom build Cervelo P5X to triathletes from the nearby RNAS, now had BSOs from Sports Direct greeting you at the front of the store.

It's now no more, it's just simply "Evans Yeovil", I went back in the summer, empty workshop, no mechanics, no cafe, nothing you would want to buy.

 

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NoOneSpecial replied to rumlad | 8 months ago
8 likes

Yes indeed job losses are always an awful thing to happen, especially in these uncertain times.

Perhaps the 'keen cyclists' who work for Wiggle can apply to their local LBS for a job......

Oh dear, they can't as the LBS had to close due to the likes of Wiggle and not being supported by the new generation of 'cyclists'.

I have been in the bike industry for decades and have seen how much the industry has changed, mostly for the good with family cycling, commuting and electric bike sales going through the roof.

But, there are the idiots who buy everything online and 'shock, horror!' the local LBS is ACTUALLY going to charge them to fit said parts. A lot are incompatable anyway and they have to pay RRP for the correct parts!

And there are some to come in on a busy Saturday with a bike that is the same as you were trying to sell (in stock) to them but 'got it cheaper online'. They wonder why you don't drop everything to fix their mechanical/puncture etc as you have a shop full of people and they bought the bike in a box.

They don't understand why the workshop turnaround is two weeks or more. Perhaps it is because we have a good reputation and people trust us?

Two bikes  in a week recently with the pedals threaded onto the wrong cranks.....

Do Wiggle build wheels? Do Wiggle advise customer of the best traffic-free cycling famiy routes? Do Wiggle get someone who hasn't ridden for fifty years riding again on an ebike?

Support your LBS. The money we get paid is crap, but for a lot of us it is our life and our passion.

Rant over.

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Rik Mayals unde... replied to NoOneSpecial | 8 months ago
2 likes

Well said. I had the very same conversation this week with my LBS. Almost every day he gats someone in who has bought something online and they expect him to drop everything to fit it there and then, after all it'll only take ten minutes to fit. What? You're actually going to charge me for fitting it?

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Simon E replied to Rik Mayals underpants | 8 months ago
0 likes

The other cheeky move I've heard is of people (not anyone they know) who go into LBS, asks to price match a price they've seen online. Dealer feels obliged to do it, even though the margin is negligible because the alternative is losing the sale and also that person's possible future custom, however unlikely that might be.

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Brauchsel replied to NoOneSpecial | 8 months ago
6 likes

On the other side to that, I don't go to my nearest LBS any more primarily because of their attitude. I'm not a professional mechanic, so sometimes I don't know what to do and sometimes I think I do and it turns out I was wrong. 

I'm happy to pay for their labour and expertise, and I'm happy to wait my turn to be seen and to be told they won't get to the work for a few days. I'm a customer like anyone else, I've no reason to expect special treatment. 

I'm not happy though to be ignored because someone's mate has just come in, nor to be openly eye-rolled for not being a great mechanic: if I was, I'd do the work myself. The final straw was being charged £150 for setting up derailleurs and cabling, then finding out the FD was clipping the crank on every turn. 

Things are cheaper off the internet, we don't do price-fixing any more and so LBSs need to find a niche to compete in. Service seems obvious: fit and fix stuff for people, and don't be a dick about it. Get someone in to do customer service if your mechanics are better with bikes than people.

I'm not sure there's much point in selling much beyond the sorts of emergency purchases people can't wait for (tubes, tyres etc). If you've not got masses of stock (especially bikes), you can work from smaller premises, or at least have a smaller shop-front and more workshop space.

There seem to be a few places near me (south London) specialising in repairs/services and not selling much stuff. I haven't tried them, but it seems a good way of adapting and keeping mechanics in employment. 

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galibiervelo | 8 months ago
4 likes

"start of big changes that have to play out,”  Awful that 450 jobs and usually keen cyclists working within the bike industry many go withing crc/wiggle. Hopefully the individual brands can be saved. We already have had emails from factories looking us to buy fabrics and stitching time from cancelled orders, so the oversupply and reduced prices will help the consumer in the short term. Products 'dumped' on the market helps no one longterm 

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Patrick9-32 | 8 months ago
5 likes

I hope that all the employees can find silver linings to this cloud, best of luck to all of you if you happen to read this!

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