Wiggle and sister online retailer Chain Reaction Cycles have launched their annual Black Friday campaigns, offering discounts of up to 60 per cent on a range of cycling gear. But with reports that the business has entered voluntary administration, or at least is set to do so imminently, is it the right time for you to be looking to snap up a bargain through them, and what recourse might you have if you forked out your hard-earned but received nothing in return?
Now, pretty much all of us like a bargain, and in past years here at road.cc and on our sister sites this is a time of year when we flag up some of the best deals to be had as brands and retailers push their Black Friday deals in the run-up to the Christmas shopping season.
The uncertainty currently hanging over Wiggle CRC– a business we imagine most of you are likely to have bought from at some point – however, due to its ultimate parent company withdrawing a promised €150 million credit facility to immediate parent company Signa Sports United, means that extra caution is needed when your cursor is hanging over that “buy” button.
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 – whether or not those are true, they provide a sign that all is not well at the business.
Wiggle CRC is of course a major player in the cycling retail sector in the UK and beyond, with a customer base that in many cases have bought from them for a decade or more, and the shockwaves should it fail would be felt throughout the industry – and would also leave consumers who had ordered goods from it being potentially left out of pocket, so what are your rights should the worse happen?
Under consumer law relating to online shopping, you have the right as a customer to cancel an order within 14 days of receiving goods that have been ordered from a UK-based business, and another 14 days to return them, and you do not have to provide a reason for the cancellation of the order. The retailer must then refund you within 14 days of the goods being returned.
In practice, if you’ve ever tried doing that, you may have found that it takes a number of emails, online chats with customer services and even phone calls to actually secure that refund, but the law is on your side.
But what if your goods fail to arrive in the first place? Consumer watchdog Which? provides this step-by-step guide to what your rights are – including being able to cancel the order and request a refund – but of course the situation becomes more complicated when the retailer you are buying from is in financial difficulties or even ceases trading altogether.
The goods you have ordered online may not turn up at all, and unless you have paid for your purchases using a credit card, which may protect you in some circumstances (see below) you will have no protection and most likely end up out of pocket. As for returning goods in those circumstances? Forget it. If they’re in good nick and you really don’t want them, try selling them on eBay or Facebook Marketplace.
If you do feel tempted by the offers currently being promoted as Black Friday deals by Wiggle or Chain Reaction Cycles, one way you can protect yourself, as we alluded to above, is to ensure that you pay by credit card, and not by debit card or other means of payment, although it only applies to items above a certain value.
Under section 75 of the Consumer Credit Act, where an item costing between £100 and £30,000 is bought using a credit card in England, Scotland and Wales, the company issuing the card bears equal responsibility with the seller in the event that the goods are not delivered, or prove to be faulty or not up to standard.
It is important to note that the protection only applies to purchases made using a credit card and not a debit card, and only applies to individual items costing £100 or more; say you used your credit card to but a pair of wheels for £500, and in the same transaction a pair of bibshorts for £90, you would be protected (and entitled to a refund from the credit card issuer) for the former, but not the latter.
After analysing WiggleCRC's predicament, chartered accountant Nigel Foskett told road.cc: "I hope anyone who bought recently did so on a credit card."
Traditionally, Black Friday is the day after Thanksgiving, which falls annually on the third Thursday of November, the following day marking the launch of the busy holiday season for retailers across the United States.
Since the advent of online selling, however, it has also been harnessed by the likes of Amazon to kickstart their sales ahead of what is by far the most important period of the year for most retailers.
And with initiatives such as Cyber Monday, which follows the weekend after Thanksgiving, subsequently being developed, initially by online pure-players, and bricks-and-mortar retailers responding to the threat posed by the internet by discounting items in-store in the run-up to Christmas as well as beefing up their owe-commerce platforms, nowadays the last couple of months of the year have become a rich hunting ground for shoppers seeking bargains.
While that may be great news for consumers looking to save cash – something that is increasingly important to many of us with the cost of living crisis – it’s bad news for retailers.
As we said above, the run-up to Christmas is the key trading period for the sector, with some exceptions (such as garden centres, when Easter assumes that role) and before the internet, and its laser-sharp focus on price, came along, it was also when those businesses made the bulk of their annual profits, with goods sold at full price in the run-up to 25 December and discounting typically only happening in the post-Christmas sales.
Now, however, discounting is effectively year-round, and in many cases some of the better deals you will see over the weeks that Black Friday promotions are run are loss-leaders for the retailers selling them – the hope being, that once you are on their site, you’ll add some other items on which they may at least make some margin.
That creates a race to the bottom in which for many shoppers, price becomes paramount. True, many consumers will stick with buying from a particular retailer or brand when buying online due to the trust that has been built up in some cases over a number of years, and Wiggle is one such business that has enjoyed that reputation – although as we saw in 2020 when hackers compromised thousands of its customers' accounts, it doesn’t take much for that brand loyalty and trust to start to evaporate.
There’s a tried and tested saying in business that “turnover is vanity, profits are sanity, but cash is king.”
In other words, it’s one thing to flag up year-on-year sales growth as a marker of a company’s success, but that is meaningless unless those sales are also made at margins that allow a profit to be made – and, crucially, for at least some of that profit to be banked.
In today’s cut-throat retail environment in which the focus is on price, it has become increasingly difficult for many companies to make sufficient margin to cover their overheads, let alone generate cash – and often, where a business is owned by a private equity firm, as Wiggle CRC itself was for many years, such cash is often primarily destined to service the debt that it would have been saddled with when those owners came on board.
SSU, which earlier this month delisted from the New York Stock Exchange and said it was looking to dispose of “non-performing assets,” potentially including Wiggle CRC, paid off the business’s £312.9 million external shareholder and bank debt when it acquired it in December 2021.
In its most recently filed annual reports and accounts, covering the year to 30 September 2022, Wiggle Limited reported turnover of £252 million, 62 per cent of which originated in the UK, and a pre-tax loss of £97 million.
As with much of the cycling industry, the business was boosted by increased uptake of cycling due to pandemic lockdowns in 2020 and 2021, but saw sales fall away as countries withdrew restrictions, with sales falling by 32 per cent in the latest financial year.
Wiggle CRC does of course benefit from strong brand recognition and customer loyalty, and given the potential shockwaves its demise would send through the cycling sector, there are few who would hope that it does weather the storm, and that the term Black Friday remains associated with its online discounting, and nothing more.
Simon joined road.cc 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.