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I ordered stuff yesterday afternoon, it arrived half an hour ago… 👍
I believe people have been implying that Chiggle had been “loaded with debt” from its own purchase by VCs, rather than just operational losses.<br />
VCs don’t load a company with debt, it would be a drag on growth.
Private Equity do, to increase their leverage and profits.
@oceanskipper mine came this morning. 😛
And thats what makes Amazon perfect. I don’t go to Amazon, navigate my way through various menus and then idly browse their wares – you’d be there for the rest of eternity. I log on, type in what I want into the search bar, scroll through a few of the results to make sure I think I’m buying cheapest/best and hit buy.
FTFY
Amazon is an utter hole, unless you know exactly what you want they will list any old shit so you buy that instead.
Signal Sports North America closed down a few days ago. No warranty support there now.
If you're on LinkedIn there more info here
https://www.linkedin.com/posts/hapseliga_opentowork-activity-7121056597061107712-PtXR?utm_source=share&utm_medium=member_android
It shows the normal personnel not just the faceless PE side.
This is a few days old so I may have missed someone else posting it.
Shame that their demise will only bring back a smaller CRC.Wiggle equivalaent and will not bring back the LBSs that we lost.
(unified live stock control I suspect).
This answers the question about why the new website was rolled out. Wiggle, CRC, and Hotlines all had their own individual systems, so staff were having to manually move stock between websites, which is why prior to the new website, something could show as being out of stock on one of the sites, yet still in stock on the others.
However the whole rollout was a disaster. Hotlines couldn't process shop orders for a few weeks, as the functionality for B2B sales hadn't been implemented correctly/fully.
The major fallout from this if Nukeproof disappear, are all the LBSs who have sold them.
A customer's warranty legally lies with the selling retailer, so if those LBSs no longer have the backup of the manufacturer, they're going to have a significant liability.
I can’t believe anyone thinks Amazon’s catalogue, search and UI is anything other than a complete mess. If you try searching for a specific item, unless it’s something bought by millions of others, it will show scores of completely irrelevant products first. Add in all the third party marketplace sellers who have the put incorrect details in the various specifications fields and you’ve got a recipe for disaster.
Bikester, Probikeshop etc. goes
https://www.pinkbike.com/news/signa-sports-uniteds-internetstores-gmbh-declares-insolvency.html
Looks like it’s a MUCH bigger story than just loss making bike part retailer goes south.
This just posted on Pinkbike,
https://bnn.network/politics/rene-benkos-real-estate-empire-on-the-brink-a-crisis-unfolding/
sounds like the golden goose of leveraged investment stopped paying out and rather rapidly caused the loss leader market domination group of companies to be unaffordable to keep funding their losses.
I’ve been trying to work out how much a percentage of the whole group the Chiggle group is. It’s really hard to be sure with the complex structures of companies reporting differently. I reccon it’s about 30-40% ish, so if the group does bad that’s a large proportion of the problem.
interesting. I’m sure this will get a more twisted plot as this continues to come to light. I’m still unsure of the full scope or potential impact on the rest of the bike industry both in the U.K. and the manufacturing base overseas.
Neil SuperstarComponents
Bikester, Probikeshop etc. goes
And Fixie Inc who used to make some interesting stuff.
@iamtheressurection
Do you not think it’s unhealthy to want a business to fail
Businesses have to fail in order for there to be progress.
Rene Benko, Signa's owner has been investigated for corruption, bribery, fraud etc in Austria, a few cases come up. He seems to have attracted the prosecutor's attention there for a while. I'm sure it's all legit though.
50% holding in Selfridges as well
Billions of Saudi investment in the Selfridges funding deal. Plus taking out billions more against the property. Well I’m sure that’s all legit
Turns out this flogging bike stuff is small fry in the big picture.
Neil SuperstarComponents
Businesses have to fail in order for there to be progress.
I think the world is a bit more nuanced than that.
Yes, learning from mistakes should bring progress, but it’s hardly the only way and in no way does a mistake have to be terminal.
Would be competitors who think they can do it better or differently don’t wait for the incumbent to fail first.
So, we seem to be in the territory of discussing morality in business dealings.
is there a responsibility on the previous owners to realise they are getting into a deal with the devil and think about maybe less growth/profit but greater long term stability?
or to put it another way, how much responsibility does J P McManus bear for the sale to the Glazers?
Signa Sports Group is a division of Signa Holdings but without knowing much more about the overall corporate structure it's impossible to say whether problems in the former will affect the latter.
Everything else is speculation.
or to put it another way, how much responsibility does J P McManus bear for the sale to the Glazers?
I guess another way to think about it is that anyone who was fairly competent at running an online bike shop and sold out is now sitting on a fairly large pile of cash and there is about to be a rather large hole in the market...
Frank you have that the wrong way around. The apparent problems bubbling in Signa Holdings is looking to be the reason for them pulling funding from Signa Sports.
without the cash flowing in to fund Signa Sports losses it results in the companies folding which we are seeing.
my point is that the root cause of this flux in the bike industry originated far away, but it doesn’t alter that the sports businesses fundamentals weren’t viable as standalone businesses.
Neil Supsetstarcomponents
Can’t see them surviving in their current form as their balance sheet will be laden with debt from the acquisition - it’s not like you’re buying a well-oiled machine with a smooth running website and fulfilment operation. With huge oversupply across the industry, stock probably won’t be worth as much as book either. Maybe someone will buy the brand and goodwill to improve their industry presence?
Isn't the issue that nobody knows if the balance sheet is loaded from debt by the acquisition? <br /><br />
from road.cc
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.
regardless, CRC\wiggle is having a fire sale of stock, not paying invoices and not buying any new stock. Seems at best this will result in a much smaller enterprise emerging at the end.
They've clearly stopped paying Google as they're no longer appearing in the sponsored product ads .
it’s impossible to say whether problems in the former will affect the latter.
I think the issue sounds like its probably started at Signa Holdings, they've withdrawn their letter of credit from the Sports division; not because they have no faith that the sports division can recover from the downturn in discretional hobby spending, but because they might need that line themselves. Because Sports rely on Holdings to underwrite what they do, without it they risk folding, and the whole pack of cards starts to look decidedly shaky. It probably means that at its core, Wiggle/CRC is mostly viable, and if it get carved away successfully can probably, with a bit restructuring, stand on its own. Let's hope that for the sake of the folks that work there, and its suppliers that's what happens
Very interesting discussion and great we have Neil in the thread. What I am curious about is whether at the heart of the business there is a fundamentally profitable model. What is the gross margin? Outside of costs like web redesign and on-going leveraged debt payments does the day to day trading make a viable profit or is their pricing model so flawed (trying to achieve market share) they would never have been profit positive?
The question is… if Chiggle sold things at business viable prices how much turnover would they lose?
I get the feeling that a lot of people don’t understand how business costs work. Yes you might have 30% margin but once you take out of that gross profit all the costs such as marketing/staff/warehouse/insurance/etc you can end up negative.
now if you sell at cost you aren’t getting your money back, yet you are still paying all the other bills ontop of the stock transaction of no value.
the answer to this tells you the value of the business exstock. Next part is Stock is generally worth 10-25% of what you paid for it in a fire sale. Add the two together and is it more than the debts?
lots of questions
Neil SuperstarComponents
Developing that Vitus E-Mythique with the Bafang motor must have cost a bit, there are no other mainstream brands using that motor and from the emtb review, it sounds like they spent a lot of time working with Bafang to improve the quality of switches and connectors and other bits.
And they've also just brough at that Nukeproof with the SRAM motor.
Maybe they've not been on sale long enough ro recoup the development costs.
Those brands must be worth a fair bit??
I get the feeling that a lot of people don’t understand how business costs work. Yes you might have 30% margin but once you take out of that gross profit all the costs such as marketing/staff/warehouse/insurance/etc you can end up negative.
My company has to make 50% gross margin on it's products just to break even. On paper we make millions in gross margin, but we also have millions in costs, which have to paid before we turn an actual profit..
Well i can confirm orders are still being dispatched - order placed yesterday and arrived today. Hope Chiggle survive...far cheaper than my LBS, much more stock, and frankly a damned sight more reliable.
AND still giving out Haribo!
Developing that Vitus E-Mythique with the Bafang motor must have cost a bit, there are no other mainstream brands using that motor and from the emtb review, it sounds like they spent a lot of time working with Bafang to improve the quality of switches and connectors and other bits.
Fantic use them and while its not a mainstream brand, you see a few about and one of the notable things is their owners always seem to report good reliability. Not sure how much needed doing tbh.
Neil, the key words in your most recent post are 'apparent problems' and 'looking to be'.
The absence of many hard facts means that much of the comment about the financial health of Signa Holdings is speculation.
Anyone in with access to Austrian and German business reporting?
That would be a better source of information.
It probably means that at its core, Wiggle/CRC is mostly viable,
It was losing money. A lot of money, £92mn in 2022. On sales of £252mn. Prices a third lower than the competition? How do you define viable? It’s been loss making for years. And now those losses need to be funded with money that is not free thanks to interest rate rises.
VCs don’t load a company with debt, it would be a drag on growth.
Private Equity do, to increase their leverage and profits.
Okaaaay.
So do we actually know this has happened, or not?
I' ve got a Wiggle gift voucher to use (from last Christmas) so I thought I'd better spend it. Not having shopped at Wiggle in the past I need to create an account but keep being told to "try again later" so looks like I may have missed the boat.
Has anyone managed to make a return in the last few days?
Fortunately returned most of my bits and pieces last year when I thought something like this was possible, but I did buy a £20 headset a few weeks ago which was not like the picture. Not the end of the world obvs, but I don't want it!
I'm not risking sending anything back.
I'll sell the trousers that were too big on eBay or here instead.
It was losing money. A lot of money, £92mn in 2022. On sales of £252mn. Prices a third lower than the competition? How do you define viable? It’s been loss making for years. And now those losses need to be funded with money that is not free thanks to interest rate rises.
The £92m reported loss in 2022 was misleading as a large part of that was interest to the previous private equity owners and transaction related costs. The adjusted EBITDA (trading profit) was a loss of £5.8m compared to a profit of £34.2m in 2021. Looking back further, 2020 was a profit of £14.5m and 2019 a loss of £0.8m. 2018 was a profit of £12.0m and 2017 around break-even. So it's been up and down (and it's probably safe to assume that 2023 will be worse).
I sent something back last Wednesday, arrived Thursday evening and they emailed to say the refund has been processed this morning.
Bikester, Probikeshop etc. goes
Aren't you supposed to stop trading if you declare insolvency?
Looks like both have their websites up and are still taking orders (although Bikester are saying they can't do returns at the moment).
Sent a couple of things back last week and got the refund into my account today.
Called into the Belfast store on Saturday and it was busy!
Sent a couple of things back last week and got the refund into my account today.
Might risk it with the £20 headset then, chances are it'll still be lying round this time next year otherwise.
Just read on road.cc that Mike Fraser has his beady little eyes on it for Frasers Group.
Can’t think of a worse owner. No doubt the existing brands will be replaced with cheap and nasty sweatshop equivalents. How much high street shit does he own now?
I know people love to hate Mike Ashley but he didn't run this once good business into the ground.
And at least he tries to keep the high street going. I was rather surprised when a Sports Direct opened in Matlock this year - they went into a big store vacated by M&Co on a fairly dead street that would probably have lay empty for years.