The latest blow in the seemingly never-ending bad news cycle for Wiggle Chain Reaction and other cycling retailers owned by Signa Sports United (SSU) is that the company has closed its United States offices and is preparing to make insolvency filings.
The update comes from Bicycle Retailer and Industry News, SSU closing its Park City offices in Utah, the site which was home to operations for Vitus and Nukeproof, and was opened by Hap Seliga who said "an amazing group of people has been forced to swallow a bitter pill".
"Despite exceeding our top and bottom line Financial Year 2023 goals handily, Signa Sports United North America's bike division has been forced to cease all operations with less than a few days' notice. This was triggered Monday by a sudden reneging of a binding €150 million equity commitment to Signa Sports United N.V.
"To say this comes as a shock is an understatement. I haven't even begun to be able to process this yet."
The future of Berlin-based SSU was looking bleak from midway through last week after its parent company, Signa Holding, withdrew €150m of financing a week after it had delisted its shares from the New York Stock Exchange amid "severe liquidity and profitability challenges".
Signa Holding informed SSU – which also owns Bikester and Probikeshop – that it was terminating its unconditional equity commitment, funding which began in June 2023 and was deemed crucial to securing the company's future.
On Friday it was reported that the company is preparing to make insolvency filings for its subsidiaries in the coming days.
Earlier in the week, SSU had been critical of the withdrawal of the funding promise and said that ending the commitment of funds, needed to "cover the operating financial needs of SSU and to secure the ongoing concern", was "unjustified" and that "appropriate legal steps" would be taken.
"The Company considers the termination of the Equity Commitment Letter by SIGNA Holding unjustified," SSU said in a statement. "While the Company regrets the termination of the Equity Commitment Letter, it will take the appropriate legal steps in the interests of all its shareholders, creditors, and employees."
The parent company struggles meant further concerns for Wiggle Chain Reaction, the cycling retailer reportedly heading towards administration as a result.
On Thursday, the website Cycling Electric reported that it "has seen a notice from the company to a customer" which outlines that without securing an alternative source of funding to SSU (which was itself depending on the promised but withdrawn funding from controlling shareholder Signa International Sports Holding), Wiggle will "have no choice but to begin administration proceedings."
Mike Ashley's Frasers Group, which already holds Evans Cycles and ProBikeKit in its portfolio, has been touted as the most likely candidate to buy Wiggle Chain Reaction Cycles should it be put up for sale.
And it was to that backdrop that, on Friday, Wiggle Chain Reaction announced an early start to the Black Friday sales on its websites, with up to 60 per cent off, prompting some concerns about spending with a troubled retailer.
There are even reports on some forums, apparently from people within the cycling industry, of the company having asked suppliers not to send in fresh stock, our article on Friday looking into whether it is safe to part with your cash in search of some of Wiggle or Chain Reaction Cycles' bargains.
Dan joined road.cc in 2020, and spent most of his first year (hopefully) keeping you entertained on the live blog. At the start of 2022 he took on the role of news editor. Before joining road.cc, Dan wrote about various sports, including football and boxing for the Daily Express, and covered the weird and wonderful world of non-league football for The Non-League Paper. Part of the generation inspired by the 2012 Olympics, Dan has been 'enjoying' life on two wheels ever since and spends his weekends making bonk-induced trips to the petrol stations of the south of England.