Three short stories from Hannah’s recent trip to the USA that demonstrate the reach of the…
UPDATE: Friday 27th October
Wiggle CRC have entered administration as of today. No ‘Self Administration’ this time – they have called in the administrators to run the company. Administrators will attempt to realise the value of the business on behalf of its creditors which in most cases simply means the company is now up for sale. How this plays out over the coming days and weeks is hard to say, but it does mean a great deal of chaos is set to envelope a large section of the bike industry, from customers with orders or returns in the system to suppliers who may or may not have been paid for their orders.
Any party who ends up being owed money by WiggleCRC will ultimately go into an ordered list of creditors to be paid out of any proceeds the administrators manage to raise from a sale. Priority is often given to creditors like the banks and HMRC. The rest of the creditors will paid out of what is left, in anything.
The appointment of administrators was officially announced today in the Gazzette.
Wiggle also published this statement on their website.
Following the making of the Administration Order on 24 October 2023, the affairs, business and property of the Company are being managed by the appointed Joint Administrators Anthony John Wright and Alastair Rex Massey.
Wiggle.com
The Joint Administrators act as agents of the Company and without personal liability.
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.
After a week of bad news from SIGNA Holdings and SIGNA Sports United, the unhappy conclusion appears inevitable, as SIGNA Sports United (SSU) is reported to be entering self administration. This matches up with evidence we’ve seen and sources we’ve spoken to this week.
In September, Wiggle CRC reported a £97m loss. Then last week, parent company SSU delisted from the New York Stock Exchange. SIGNA Holdings – parent company of SSU – then announced it was rescinding a promise of €150m funding, putting even more pressure on SSU’s finances. SSU was not happy and said in a statement:
“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. 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.”
Self administration means that the existing directors attempt to restructure the business rather than getting in actual (expensive) administrators. The process still involves legal oversight from a court. Like administration the process gives the company protection from creditors, who can’t take them to court to get their money. If self administration doesn’t work then they will have to call in real administrators and hand control of the company over to them. If you like bikes, you should join us in hoping that a success resolution is found.
Who is SSU and why should you care? Well, it’s the parent company of Wiggle CRC – the company behind the Chain Reaction and Wiggle websites that you’ve probably bought parts from at some point. Under the same umbrella are bike brands Nukeproof, Ragley, and Vitus, as well as distributor Hotlines. This means that all those brands – and their staff, associated race teams and sponsored athletes – are at risk. Given the success and profile of some of them – including Nukeproof’s recent expansion into the USA, even having a rider at Red Bull Rampage – this is real giant killing territory.
But it won’t end there. Wiggle CRC is a huge buyer of products, and if the rumours we’re hearing are true, there are a number of distributors with significant exposure to any Wiggle CRC insolvency. Everything you see on their websites that aren’t in-house brands – from tyres to tools to helmets – has been bought from those manufacturers or their distributors. If that stock hasn’t been paid for – and we’re hearing reports of up to £2m in stock sitting with Wiggle CRC for a single distributor – that’s going to cause cash flow problems across the industry. And as we’ve already seen this year, the bike industry is already struggling. That’s a lot of people out there wondering if their jobs will still be there in the weeks to come.
We’ve seen an excerpt of correspondence which suggests that at the start of the week SSU was asking distributors not to send extra stock or orders to them, and to keep goods in their warehouses. That will at least limit any further exposure to those brands.
However, there will be many more smaller amounts owed around the industry too. Consumers hearing the rumours this week have been debating whether to return unwanted goods, as well as wondering what warranty may remain if these big bike brands end up closing – or under new ownership.
There’s already a long Forum thread about the rumours. Catch up here. And here’s hoping for the most positive possible outcomes for all those concerned.
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