Yet more bad news in the ongoing crisis facing cycling retailer Wiggle Chain Reaction as its parent company, the online retail giant Signa Sports United, has filed for insolvency at court in Germany.
The news, first reported by Bike Europe, was to be expected, the past few weeks a seemingly never-ending news cycle of increasingly grim updates about Wiggle Chain Reaction's future, finishing with Friday's announcement that the company had entered administration and been put up for sale amid a funding crisis for its parent company.
Now, Signa Sports United has filed for insolvency at court in Bielefeld in Germany, the retailer which also owns Probikeshop, Bikestar and Fahrrad.de being appointed a provisional administrator Christian Gerloff.
The troubled situation became a crisis two weeks ago when Signa Sports United's own parent company, Signa Holding, withdrew a funding commitment for €150m of financing amid "severe liquidity and profitability challenges". That money had been promised until September 2025 to "cover the operating financial needs of SSU and to secure the ongoing concern" of the company, but its withdrawal plunged Signa Sports United and its subsidiaries into uncertainty.
Signa Sports United said the funding was essential for the company to meet its obligations and constituted the basis of its ongoing concern and liquidity assumptions. The company, unsurprisingly, branded the termination "unjustified" and said it will take "appropriate legal steps".
"After many years of mutually trusted collaboration and reliable financing between the Company and SIGNA Holding, SSU has relied on the binding and unconditional nature of the Equity Commitment Letter to continue to draw funds to meet its near-term obligations and for its going concern assessment of the Company and its subsidiaries," Signa Sports United said in a statement two weeks ago, a week before filing for insolvency.
"The Company considers the termination of the Equity Commitment Letter by SIGNA Holding unjustified. 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."
Speaking to road.cc on Friday, Rory Hitchens of Greenleaves Cycling agency warned that the collapse of Wiggle Chain Reaction could be "just the start of big changes that have to play out" and suggested that distributors and manufacturers doing business with the company may also struggle.
The administrator for Wiggle Chain Reaction yesterday said it was "already in discussion with a number of interested parties", Mike Ashley's Frasers Group, which already owns Evans Cycles and Probikekit, rumoured to be interested.
Amid the situation Black Friday has begun early on both Wiggle and Chain Reaction Cycles, offering discounts of up to 60 per cent on a range of cycling gear. There have also been concerns from bike shops that should the retailers go bankrupt then administrators would get rid of their stock at low prices to recoup as much money as possible, in turn flooding the market with cheap goods.
"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," Hitchens told road.cc.
"Which businesses in the supply chain selling to Wiggle Chain Reaction will survive or suffer the most? Such as the UK distributors selling to Wiggle Chain Reaction Cycles, 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 Chain Reaction Cycles, the likes of NukeProof, Vitus, and Prime?
"The Wiggle Chain Reaction Cycles collapse is just the start of big changes that have to play out," he warned.
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.