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Wiggle and Chain Reaction owner facing “severe liquidity and profitability challenges” as it announces delisting of shares

The German e-commerce giant, also behind Bikester and Probikeshop, said that weaker consumer demand in the cycling sector has continued to impact its finances

Signa Sports United (SSU), the parent company of several cycling retailer giants like Wiggle and Chain Reaction Cycles has said that it is suffering from “severe liquidity and profitability challenges” as it announces the delisting of its shares, citing subdued demand, inventory overstock, and weakened consumer interest in the cycling sector which has impacted its overall performance adversely.

The decision to restructure has reportedly been influenced by the Berlin-based sports retailing giant’s performance in the first nine months of 2023, particularly as the “bike segment has continued to lag management expectations”.

SSU, which also owns other cycling e-commerce websites such as Bikester, Fahrrad.de and Probikeshop, besides also having operations in tennis and other outdoor sports, will delist its shares from the New York Stock Exchange. The company said that the benefits of being listed on the exchange did not “justify the costs and demands of management’s time necessary to meet the Company’s US regulatory commitments”.

The delisting is expected to take place around October 22, and it will subsequently also suspend its reporting obligations to the US Securities and Exchange Commission, which would be in the “overall best interests of the Company and its stockholder”.

> Brexit, Covid, and economic uncertainty blamed as Wiggle Chain Reaction Cycles records £97 million loss

SSU said in a statement: “The operating environment for the Company in the first nine months of FY23 and thereafter was characterised by a continuation of material disruptions which started in the second half of last year.

“Although some economic indicators across core markets have continued to improve slightly, the demand for the Company’s products remains significantly below 2022 and pre-pandemic levels.

“In addition, inventory levels across the industry remain elevated as market participants still aim to clear excess inventory, resulting in a material adverse effect on the Company’s gross margins and increasing negative cash flows.”

Wiggle Christmas Gift Guide for Cyclists 2021

Wiggle and Chain Reaction Cycles, two of the UK’s leading cycling e-commerce sites had joined forces in 2016, merging to form WiggleCRC.

In 2021, it was announced that WiggleCRC would be taken over by the German online giant Signa Sports United — not to be confused with another UK-based retailer Sigma Sports. The acquisition of the UK business was said to be tied to SSU’s forthcoming NYSE initial public offering (IPO) at the time, and created a group with annual sales of $1.6 billion.

However, as the cycling industry still continues to struggle to come to terms with the post-pandemic slump plagued by overstocked inventories and supply chain issues, it seems that even the biggest retailers have been clawed down by the industry-wide trials and tribulations.

> “If you voted for Brexit, please realise this is 90% because of your decision”: UK cycle distributor FLi ceases trading

SSU had been trading on the NYSE since late 2021, just a few months after taking over WiggleCRC. At the time, its stock prices were around $9, but they’ve now fallen down to just $0.94, as per October 2023’s figures.

Wiggle Bike Service and Repair.jpg

Wiggle, meanwhile, had undergone cosmetic surgery in April this year — the website ditching its iconic orange branding and quirky logo for a snazzy new green and blue theme along with a contentious new website, which cyclists and long-time customers from the website weren’t the most pleased with.

> "Awful, poor branding, less functionality. What was the point?": Customers not happy with Wiggle's new website

And a few days later, the newly face-lifted website, along with that of Chain Reaction Cycles, went down for a while unannounced, leaving even more people disgruntled.

Just last month, WiggleCRC had announced a £97 million loss for the year 2022, almost seven times greater than the losses sustained in 2021. The company’s former chief finance officer blamed the aftereffects of Covid, Brexit, and ongoing economic uncertainty for the significant drop.

While the current challenging state of the UK economy was blamed for “subduing consumer demand” (UK sales fell by 32 per cent compared to 2020 and 2021), the company claimed its drop in international sales of 26 per cent was “driven mainly by the full year impact of Brexit reducing sales into the EU, where higher duty and fulfilment costs have necessitated higher pricing”.

The acquisition of Wiggle CRC by Signa Sports United during the period in question also brought “significant one-off legal and professional and staffing costs”, adversely affecting net profit by over £36 million, though SSU also fully repaid and waived all shareholder debt and intercompany loans, amounting to £312 million, as part of the deal.

SSU, meanwhile, has also announced that it is shuffling its Board of Directors, extending the scope of Torsten Waack van Wasen, CEO of Internetstores to become part of the company’s management team as Chief Performance Officer (CPO).

The German group said that van Wasen, with his many years of restructuring experience from his prior positions, will step into the role of SSU’s CEO in the first quarter of 2024, with the current CEO Stephan Zoll bidding adieu to the company after more than five years.

Adwitiya joined road.cc in 2023 as a news writer after graduating with a masters in journalism from Cardiff University. His dissertation focused on active travel, which soon threw him into the deep end of covering everything related to the two-wheeled tool, and now cycling is as big a part of his life as guitars and football. He has previously covered local and national politics for Voice Wales, and also likes to writes about science, tech and the environment, if he can find the time. Living right next to the Taff trail in the Welsh capital, you can find him trying to tackle the brutal climbs in the valleys.

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41 comments

Avatar
Keesvant | 9 months ago
0 likes

Living in the Netherlands used to buy sis food and dhb cycling kit (very good value).
At wiggle. I just bought new dhb knee warmers, had a pair that lasted 5 years. Used every autum/winter/spring day to cycle to work. I first bought a pair from le col and one from gore but both suck !
So it's dhb from wiggle ! After brexit (why stupids ?) I buy at bike24, the best.period.
Exotic light parts at R2 bike, simple parts at Mantel , and stuff needed overnight at futurem shop..

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matthewn5 | 9 months ago
0 likes

Another ex-Wiggle customer. Used to buy everything there, but the redesign and removal of wish list and logical filters just made searching an absolute pain. Like a jumble sale, or Amazon, or something shite like that.

These days I use Bikeinn, TotalCycling, Bike24, Merlin, EBay... almost anyone else.

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Velohudd | 9 months ago
1 like

Not only is their website a bag of sh!te So is their customer service - never able to actually deal with a human if there is a problem and then they cap it all off by using evri, I mean who wouldn't want the worst delivery company dealing with items of any value?

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Jimmy Ray Will | 9 months ago
0 likes

I think Wiggle/CRC is struggling with the big challenge faced throughout the bike industry; people simply aren't buying right now. 

Loads of reasons for this, but one that no one really talks about (although Bike Food's comment is reflective of it), is how the continuous march of capitalism and big business is affecting the industry as a whole.

Working to the premise that everyone has a finite amount of free wealth that they can spend on their hobby, how that money is being spent has been changed by big corporates moving in / sharpening up their game in recent years. 

Cycling is seriously expensive now (always was really), and as bikes, products etc. become ever more advanced, better marketed, and therefore more costly, people are commiting greater amounts of money to fewer items. 

The uptake of virtual cycling has reduced spend on consumables, clothing, winter riding equipment etc etc. It has however moved spend to indoor trainers, fans, computer screens, subscriptions, a lot of which are high ticket items and likely recent purchases. 

The big brands have upped their game, bikes are more expensive, less compatible with home mechanics, OEM Parts made more desirable / premium. Essentially, the big boys are understandably working hard to ensure they capture as much of that available free spend as possible. That’s just good business, in capitalism there are winners and losers and right now retailers are losing.

I can’t see any way this situation will improve, unless people suddenly reject the indoor trainer, and the industry marketing wheel somehow stops being able to sell the bigger, faster, better, dream to us consumers.

In summary, Wiggle and their ilk are doomed.  

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Miller | 9 months ago
0 likes

But they still include a pack of Haribo with orders so there's that.

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Carior | 9 months ago
4 likes

Wiggle used to be my first (and usually last port of call) for anything I needed cycling/tri related but now its not necessarily even on the list of places I check-in on.  Ultimately what it used to be was i) easy to navigate; ii) well stocked (and had specialist stuff not the mainstream halfords, CRC stuff); iii) good value.  Now I find navigating it a pain, the stocking situation is a disaster, the stuff you might want is listed but never in stock and instead there is just endless junk, add to that there are an increasing number of performance brands I can't get there and its not worth me investing enough there to maintain a loyalty discount - without which the value, if you can find what you want in stock is now "fine" but not market leading.

It's funny that the article mentions Sigma because whilst it doesn't necessarily offer the best value, it has an excellent selection of performance kit that is easy to navigate and puts an effort in to keep you appraised of stock and when they are expecting deliveries of items - as such it has now become my default.

Wiggle used to be a high quality retailer - now its just CRC with a different badge!

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Surreyrider replied to Carior | 9 months ago
1 like

Couldn't agree more. Plus Wiggle use Hermes, sorry Evri, which is anything but a plus point. Why can't they be good like they used to be?

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EraserBike | 9 months ago
6 likes

Chain Reaction is such a sad story, especially as someone from NI. A successful local company, bought up by a competitor, losing everything unique about it. And now bought up again by venture capitalists which will probably shut it down in the end because it isn't making them enough money. Someone's getting rich in all this but I feel bad for people who work there.

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hawkinspeter replied to EraserBike | 9 months ago
2 likes

EraserBike wrote:

Chain Reaction is such a sad story, especially as someone from NI. A successful local company, bought up by a competitor, losing everything unique about it. And now bought up again by venture capitalists which will probably shut it down in the end because it isn't making them enough money. Someone's getting rich in all this but I feel bad for people who work there.

It's simply Capitalism in action. Exploit the workers and make money for those who already have lots of money.

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wtjs replied to EraserBike | 9 months ago
1 like

Chain Reaction is such a sad story, especially as someone from NI

Yes, I used them for about 20 years, but abandoned when they messed me around about some duff wheels on an otherwise excellent Vitus gravel bike

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EddyBerckx | 9 months ago
1 like

Terrible website redesign aside (its simply the lack of filters and menu options for products that make it extremely hard to find anything) Wiggle is still competitive for me, at least when you take into account postage. £20 per year and you get unlimited next day delivery - that still makes it better than most.

Not as good as the old pre CR merger days though, we all know that...

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wjp202 | 9 months ago
1 like

Let's be fair, we'd tolerate a sub par website if the prices and customer service were enough of a makeweight. Fact is, the overall package of Wiggle/CRC has been awful for a long time.

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The Giblet | 9 months ago
1 like

Wiggle is a text book example of how to destroy an existing brand. However I suspect the "updated" website was a plan to destroy Wiggle and reduce the number of bike websites that the new parent now has. Why would you need the german websites along with probikekit, chain reaction and wiggle?

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hawkinspeter replied to The Giblet | 9 months ago
3 likes

The Giblet wrote:

Wiggle is a text book example of how to destroy an existing brand. However I suspect the "updated" website was a plan to destroy Wiggle and reduce the number of bike websites that the new parent now has. Why would you need the german websites along with probikekit, chain reaction and wiggle?

That makes no sense though as they could destroy the brand by just reducing their stock levels (though they seem to have done that too) without having to spend money on a website redesign.

They used to be my first port of call for parts and accessories, but their website thing annoyed me as it just smacked of hubris to push out a new design that is barely usable and then try to insist that it's better than the old one.

I now go elsewhere to source my replacement cranks.

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Surreyrider replied to hawkinspeter | 9 months ago
2 likes

That and they ditched their trademark orangey branding in favour of a rather sickly green.

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wtjs replied to hawkinspeter | 9 months ago
3 likes

I now go elsewhere to source my replacement cranks

Well, pasta is easily and cheaply available everywhere!

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TheBillder replied to The Giblet | 9 months ago
1 like

Probikekit is owned by the endlessly successful and not at all in any trouble THG. This lot own Probikeshop.

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mark1a replied to TheBillder | 9 months ago
0 likes

TheBillder wrote:

Probikekit is owned by the endlessly successful and not at all in any trouble THG. This lot own Probikeshop.

I think THG got into a bit of trouble earlier this year and sold ProBikeKit to Mike Ashley. 

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Rome73 | 9 months ago
1 like

'the company claimed its drop in international sales of 26 per cent was “driven mainly by the full year impact of Brexit reducing sales into the EU, where higher duty and fulfilment costs have necessitated higher pricing”.   1 No, you don't say. 😂 

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bike_food | 9 months ago
0 likes

COVID and working from home ever since largely stopped my online purchasing, I ride indoors so much more now, barely buy anything, probably used to spend £300 per month when commuting and riding outdoors more.

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Mybike replied to bike_food | 9 months ago
2 likes

300$ a month by riding a bike. My car is cheaper and my bike cost me 300$ a year and that's 2 bikes

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Carior replied to bike_food | 9 months ago
2 likes

Did you crash your bike and bend a derailleur hanger on every ride - or did you just ride Conti TTs down the gravel tow path every day.  I am genuinely amazed that you could spend £300 a month on commuting unless you were actively crashing your bike on a regular basis.

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wtjs replied to Carior | 9 months ago
2 likes

I am genuinely amazed that you could spend £300 a month on commuting

So am I! In October 2019 I spent £650 on a new Vitus gravel bike. I have been riding it a lot, and had to buy a new wheel rim/ rebuild and have worn out the original cassette, chainrings, a couple of tyres and several chains and some mudguards. That's less than £400

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GravelMonster | 9 months ago
0 likes

I'm guessing Wiggle will just end end up doing a phoenix and pass the burden of their mistakes on to their suppliers and buy their own stock cheap like Source BMX did. I can't see this ending well for the brands.

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nniff | 9 months ago
7 likes

From my perspective, the rot started with the Wiggle CRC merger - you used to be able to get what you needed from one or the other.  When they both became the same, if one didn't have it, neither did the other.  I suspect that their joint market share subsequently fell.  Then the webside debacle.  As it stands, the chances of them having what I want is close to zero - if they do have something, it's probably in a clown size, or only in zebra-stripes with dayglo spots

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philsinclair replied to nniff | 9 months ago
0 likes

nniff wrote:

From my perspective, the rot started with the Wiggle CRC merger - you used to be able to get what you needed from one or the other.  When they both became the same, if one didn't have it, neither did the other.  I suspect that their joint market share subsequently fell.  Then the webside debacle.  As it stands, the chances of them having what I want is close to zero - if they do have something, it's probably in a clown size, or only in zebra-stripes with dayglo spots

.... and then compounded the error with Probikeshop and Bikester. Customer Service became awful. Lack of products and choice. I used to be a big fan. Now I find what I need elsewhere and with more competitive prices.

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kil0ran replied to philsinclair | 9 months ago
5 likes

Agreed. I go anywhere but Wiggle these days. Tweeks, Winstanley, Leisure Lakes, SJS etc. All benefit from having searchable websites with live stock levels and good prices. Wiggle might be a bit cheaper but it's not worth the hassle.

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SimoninSpalding replied to kil0ran | 9 months ago
1 like

I like Sprockets online service. Good for Campag components and a real person in a bike shop if you want to ring them up. If they were local to me I would probably be there every week.

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Surreyrider replied to kil0ran | 9 months ago
6 likes

Add Merlin to that. Plus very good customer service. 

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henryb | 9 months ago
2 likes

I think (without a vast amount of evidence, I admit) that there is a change happening in the industry where online shopping for bike parts, clothing etc. is moving from 'supermarkets' like Wiggle to shopping direct from manufacturers' websites. This is particularly true for expensive things (bikes, wheels, really nice clothing, etc.) leaving Wiggle selling the cheap commodity items like inner tubes and new chains.

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