Online cycling, running and swimming retailer Wiggle has reportedly entered voluntary administration in the wake of the funding crisis that has engulfed parent company, Germany-based Signa Sports United (SSU), after the company that controls it announced earlier this week that it would no longer be providing €150 million in funding to the business over the next two years.
The website Cycling Electric reports 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outlines that without securing an alternative source of funding to SSU (which was itself depending on the promised but withdrawn funding from controlling shareholder Signa International Sports Holding), Wiggle will “have no choice but to begin administration proceedings.”
Cycling Electric also points out that recent Companies House filings by Wiggle (whose immediate holding company is UK-based Mapil Topco, which also owns Chain Reaction Cycles) highlight that the company relies upon SSU for funding, without which the “group’s ability to continue as a going concern” would be subject to “material uncertainty.”
Earlier, Mike Ashley’s Frasers Group was rumoured to be the most likely candidate to buy Wiggle Chain Reaction Cycles (CRC) should it be put up for sale.
As we reported yesterday, Signa Sports United (SSU), which bought Wiggle CRC in 2021, has had promised funding of €150 million withdrawn by parent company Signa Holding, which is controlled by the Austrian billionaire René Benko.
Days earlier, SSU had delisted its shares from the New York Stock Exchange, two years after they were listed on it, citing “severe liquidity and profitability challenges.”
According to Bloomberg, the withdrawal of funding and scaling back of retail activities comes as Benko seeks to shore up the finances of the commercial property business that underpins his fortune.
On Tuesday, Frasers Group, which owns Sports Direct, House of Fraser and Evans Cycles, among other retail chains, announced that it had agreed to buy the German sporting goods retailer SportScheck, which trades from 34 outlets, from SSU.
“Growing and expanding our sports business is a key focus area in becoming an international retail business.
“The German market represents a huge opportunity for us, and we look forward to bringing our experience, resources and relationships to strengthen the SportScheck business.”
Buying up retail chains and brands that have fallen on hard times, initially in the UK but now abroad too, was a key factor underpinning the growth of Sports Direct and subsequently Fraser Group.
Trade journal Bike Europe believes that Ashley’s company could now also seek to further turn SSU’s problems to its own advantage to bolster its online presence within cycling.
Besides owning Evans Cycles – bought out of administration by Sports Direct in 2018 – earlier this year the group also bought the online retailer ProBikeKit.
Any such deal would afford the opportunity of giving Wiggle CRC’s established in-house brands such as DHB in clothing an established high street presence through Evans’ stores.
And with the two businesses, according to their latest annual reports and accounts, having around half the level of turnover in the UK cycling market as market leader Halfords (a combined figure of approximately £200 million versus perhaps £400 million), any potential deal would be likely to escape being blocked by the Competition & Markets Authority.
Speaking about the SportsScheck acquisition earlier this week, Frasers Group CEO Michael Murray said on Tuesday: “Acquiring the leading sporting goods retailer in Germany is a big step in our journey to becoming the number one sports retailer in EMEA (Europe, Middle East and Africa) – and we are delighted to do this with the full support of major global brand partners, Adidas and Nike.”
We have approached Frasers Group for a comment on the speculation linking them to Wiggle CRC.
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.