Wiggle Chain Reaction has confirmed that it is entering administration, with the company now up for sale, following weeks of speculation about the beleaguered retail giant’s future amid a funding crisis for its parent company and reports of cancelled orders and payments to suppliers.
In a statement released today, Wiggle Limited said that the affairs, business, and property of the company are now being managed by joint administrators Anthony John Wright and Alastair Rex Massey of FRP Advisory, a corporate advisory and restructuring firm.
However, the company has also said that “all orders made with Wiggle will continue to be delivered as usual, and our standard terms and conditions still apply for item returns and warranty claims”.
The joint administrators have also confirmed that the Wiggle CRC brand will be put up for sale, while subsidiaries Chain Reaction and distributor Hotlines will enter administration imminently.
“Wiggle CRC, the online sports retail group, is set to be put up for sale following the appointment of Joint Administrators,” the administrators said in a statement today.
“Alastair Massey and Tony Wright of specialist business advisory firm FRP were appointed to Mapil Midco 1 Limited and Wiggle Limited on 25th October 2023.
“A group of subsidiary companies that form the remainder of Wiggle CRC, including Chain Reaction Cycles Limited, Chain Reaction Cycles Retail Limited, and Hotlines Europe Limited, are expected to be placed into administration imminently.
“We’d like to reassure customers that all operations are running as normal, including the websites and online sales of Wiggle.com, ChainReactionCycles.com, and Hotlines-UK.com. Customer service support is live and can be contacted with any queries through the respective websites.”
> What the hell is going on in the bike industry? Wiggle Chain Reaction turmoil discussed
The appointment of administrators marks the rather inevitable culmination of a tumultuous month for Wiggle Chain Reaction Cycles.
At the start of September, Wiggle CRC announced a pre-tax loss of £97 million for 2022, a significant drop from the previous year blamed on the after-effects of the Covid pandemic, Brexit, and the ongoing economic uncertainty within the bike industry.
Then, earlier this month, the cycling and outdoor retailer’s parent company, Signa Sports United (SSU), confirmed that it was suffering “severe liquidity and profitability challenges” amid the delisting of its shares and what it described as the “unjustified” withdrawal of €150 million in previously guaranteed funding from its own owner.
That sudden shortfall in funding sparked rumours last week that Wiggle CRC itself was heading towards administration and that the company had stopped paying its suppliers, while Berlin-based SSU – which also owns Bikester and Probikeshop – prepared to make insolvency filings for its subsidiaries and closed its offices in the United States.
> “I hope anyone who bought recently used a credit card”: Black Friday begins at Wiggle Chain Reaction Cycles… but is it safe to spend with the troubled retail giant?
While Wiggle Chain Reaction’s confirmation today that it has appointed administrators marks the latest in an increasingly long line of events associated with SSU’s troubles, the news itself promises to cause serious ripples across the cycling industry.
“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,” industry stalwart and the founder of new agency Greenleaves Cycling, Rory Hitchens, told road.cc this morning.
“Which businesses in the supply chain selling to WCRC will survive or suffer the most, such as the UK distributors selling to WCRC (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 CRC (the likes of NukeProof, Vitus, and Prime)?”
Hitchens continued: “Also what happens to Hotlines [the UK distributor also put up for sale by the administrators]? Where does that leave brands exclusively distributed by Hotlines? I would not expect any distributor in the UK is either in a position to, or wants to, add brands to their portfolios right now.
“The Wiggle Chain Reaction Cycles collapse is just the start of big changes that have to play out,” Hitchens concluded.
> UK bike sales fall even further after dropping to lowest level in 20 years
In any case, the retailer’s collapse comes during an extremely challenging year for the cycling industry in the UK, one which has seen bike sales slump once again, according to the Bicycle Association’s latest findings, which came just months after the national trade association reported they had fallen to a 20-year low in 2022.
Meanwhile, in July FLi Distribution ceased trading with immediate effect, as the Huddersfield-based distributor’s director blamed the “red tape and barriers to trade” currently affecting businesses for his company’s demise.
In May, Livingston-based distributor 2pure also entered administration, just months after the company announced that it was restructuring to focus solely on the cycling industry, following what it described as a “highly volatile” 2022 caused by macro-economic events in the wake of the Covid-19 pandemic and Russia’s invasion of Ukraine.
And in March, Moore Large, the leading UK distributor for well-known brands such as Tern Bicycles, Lake, Forme, ETC, Emmelle, and MeThree, entered liquidation, leading to its £35 million product inventory being auctioned off.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
