Wiggle/Chain Reaction owner Signa Sports sales up 48% but lost 37 million euros

[bychosis]

Also didn’t understand a lot of the big business talk - but TBH didn’t really try to. What I read into that was that the bike industry isn’t all that big, has limited market for expansion and skewed toward cycling passion rather than pure business decisions.

It seems when it got ‘too big to fail’ egos and greed kicked in and they didn’t read the writing on the wall. Too big to turn it around and not willing to slow down because ‘we’re gonna be the biggest’.

Shame, but perhaps for the better.

[MichaelB]

A long post/article (that I am reading through), but really shows that even the Overall company owner of the mess is also at major risk. Article is from LinkedIn and is by Jacob Dudek, who was the VP of Commercial Operations at SIGNA Sports United before he lost his job amid the turmoil

eeeeeek

https://www.linkedin.com/pulse/postmort ... dek-xau9f/

Yikes ! What a read.
I guess that I probably understand about 5 % of what is written, but enough to realise that big business is a very complex place
And that’s putting it mildly.

It is heavy indeed.

Can be summed up in one sentence. Overextended financially at the wrong time and the plan didn't work.

Lotsa dodgy financial practices though ....

[AUbicycles]

Thanks for sharing this, very insightful.

[am50em]

Wiggle and Chain Reaction Cycles to switch off international e-commerce stores, citing Brexit

https://www.cyclingnews.com/news/wiggle ... -commerce/

[MichaelB]

Wiggle and Chain Reaction Cycles to switch off international e-commerce stores, citing Brexit

https://www.cyclingnews.com/news/wiggle ... -commerce/

Bugger, another choice/supplier removed.

PFBB.

[warthog1]

Wiggle and Chain Reaction Cycles to switch off international e-commerce stores, citing Brexit

https://www.cyclingnews.com/news/wiggle ... -commerce/

Bugger, another choice/supplier removed.

PFBB.

Agreed

[bychosis]

It’s not good when a major player exits the scene, but then I don’t think it’s great to have such massive companies with significant market share either.

Don’t know what the best model is. if all we have is small local bike shops they’ll get screwed on wholesale prices and more of the profits will go to shimano/sram and it’ll cost the consumer more. If there’s a major player they’ll use their market power to drive up prices.

[g-boaf]

It is very much "small fine print" to see that they are in administration. You have to see the footer of the sites.

[Mububban]

A friend posted this screenshot as they just found out:

[Bunged Knee]

And on Wiggle site too.


For people who had already ordered from them, info below.

[pbekkerh]

After Brexit most of these companies are not feasible anyway for the rest of Europe, so we can only hope for less competition now for European dealers, so they get through this postCovid crisis.

Brexit added 25% VAT and 25$ customs handling fee to all orders from the UK.

[AUbicycles]

The shops dida lot of things right and showed many others how to do it… Not to mention exploiting legal and, at times, ‘less legitimate’ supply and logistics approaches in the race to the bottom.

Focus on the UK only is flawed but they still have reasonable market access.

Brexit is there for all in the uk bike world, though wiggle / c r c now have less buying power if they are just serving the UK. All the promised lucrative trade deals that the politicians pitched at the people failed (the UK is significantly weaker after Brexit).


One opportunity for a savvy enterprise is to buy the naming rights and rights for international sales. The brand has value and it can be pivoted, otherwise it will devalue and disappear.

[warthog1]

Brexit seemed so stupid to me and largely fueled by bigotry. It also seemed the older cohort were more in favour and less so the younger sector of the populace. The younger ones are going to have to deal with it as they watch their economy slide backwards.
I didn't follow it closely though perhaps an argument for compulsory voting much as I dislike it.

c r c/Wiggle were my go to and really helped combat the Australia tax we seemed to pay with higher prices compared to other areas. I will miss them.

[bychosis]

Brexit seemed so stupid to me and largely fueled by bigotry. It also seemed the older cohort were more in favour and less so the younger sector of the populace. The younger ones are going to have to deal with it as they watch their economy slide backwards.

It is stupid. Opening up and being collaborative is the way forward. If we don’t, we go all protectionist and end up with more bigotry and wars.

[MichaelB]

The bugger for me was that they were a good source of 2 key items at good cost that I haven't yet been able to replicate anywhere else - decently priced Bibs of a decent quality and the Hi5 Electrolyte tabs.

Luckily, the net will usually find something ....

[MichaelB]

'Once the warehouse is clear, it's game over' – WiggleCRC lays off almost entire workforce
By Will Jones published about 6 hours ago

'The new buyer apparently doesn't want anyone' says anonymous source

Crikey !!!

Just bought for the systems and IP.

The $64 question is what are the replacement options for things like

dhb Bibshorts
High5 Electrolyte tabs

[antigee]

'Once the warehouse is clear, it's game over' – WiggleCRC lays off almost entire workforce
By Will Jones published about 6 hours ago

'The new buyer apparently doesn't want anyone' says anonymous source

Crikey !!!

Just bought for the systems and IP.............

Ashley who owns what has in recent times been called the Frasers Group (previously Sports Direct) has a passion for employing the majority of a businesses employees on "Zero Hour Contracts". Big on acquiring failed businesses for next to nothing, firing and hiring "essential" staff on new terms

Zero Hours contracts are what they sound like - the employer does not guarantee any hours or pay but employees are expected to be available to be called in at short notice, there is no provision for sick pay / holidays or any other benefits:

https://www.thebusinessdesk.com/eastmid ... bike-brand

"Evans Cycles, which is owned by Shirebrook-based Frasers Group, is to cut 300 jobs and switch its remaining retail staff onto zero-hour contracts in a bid to cut costs.

Evans, which has 55 stores across the UK, was bought out of administration by Frasers Group (then Sports Direct) in 2018, will lose half of its workforce in the move......."

[MichaelB]

Sounds like this "Ashley" guy is a bit of an a$$ wipe

Whatever the new format will be, will make sure not to send him any money

[warthog1]

Sounds like this "Ashley" guy is a bit of an a$$ wipe

Whatever the new format will be, will make sure not to send him any money

Well said!

[LateStarter]

Ref for the above
https://www.cyclingnews.com/news/once-t ... -member/

I am not close to "industry" trends but is this just a UK / BREXIT thing or more general downturn in cycling ??, still seems to be prenty of riders on the street but maybe they have all stopped buying stuff? What should I be worried about / stocking up on?

[CmdrBiggles]

And—?
Chain Reaction Cycles has had one wheel in the grave and one wheel on a banana peel for many years; this news is not surprising, and for cyclists in Australia, irrelevant, not even worth a mention really. In Australia, cycling is very much alive and healthy, both as a recreation and at retail turnover level. Post-COVID, it is not quite boom-time because of the cost-of-living and mortgage crunch, but far better than comparable, larger economies (including NZ). The UK is a very different economy to Australia, and is factually in recession at this time (announced a fortnight ago); no doubt this will compound the entire retail doldrums that the UK is experiencing.

Stock up on your needs here. No need to angle for a whale in the UK.

[find_bruce]

Stock up on your needs here. No need to angle for a whale in the UK.

The 2 biggest problems in Australia are (1) the re-introduction of the Australia tax, where wholesalers ensure that the price demanded is significantly higher than in other markets (2) limited stock imported by the wholesaler - plenty of parts that are simply not available in Australia

My response has been to abandon the any manufacturer who adopts geofencing etc.

[CmdrBiggles]

Currency weaknesses, the exorbitant cost of freight/post and import duties and taxes will negate any perceived advantage from buying-in from overseas. Goodness, as a photographer I was keen to spend thousands when the US and AUD were at parity a few years ago — something like ~$20,000. Now, it is simply not worth a look, much less a plunge, with perceptions of making a good deal in a distant land going up in smoke when you do the actual calculations — a bit like saying airfares are cheap now and we should go to the USA. Inconveniently, that's not the full story when you consider the piddly currency...

Wholesalers in Australia e.g. Trek and GIANT, Focus..., among others, are at the beck and call of parent companies overseas. Indents they order and carry-in are to a large degree dictated by edicts from above — neither too much, nor too little, but settled from market analysis and stock movement. Stock presently is moving very, very slowly in Australia due to cost-of-living pressures. It will pass, and things will pick up again. You can bet your nellie that overseas head offices watch proceedings in Australia keenly!

What is "Australia Tax"...??

[MichaelB]

..

My response has been to abandon the any manufacturer who adopts geofencing etc.

Dome that where practicable (cassettes & disc pads mainly) but some bits aren't that easy to do.

[warthog1]

What is "Australia Tax"...??

The higher price we pay compared to other countries.
Largely a result of monopolistic agents/importers who set a high price.
Wiggle/c r c was a great way to avoid that.