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I have read the whole thread and agree he doesn’t sound like a normal punter but I guess that’s because he isn’t, being from the industry which CRC etc are in I suppose he has a bit more insight than someone like me, who is basically clueless to how it all works.
To be fair, the comments where he knows what he is talking about (bikes and bike bits) have veen very insightful, it's the bits where he's slagging off competitors based on his own exotic understanding of insolvency and the law that have been unenlightening.
Ralpha must be making a profit - flogging a top that costs £5 to make at £100 is a great business
Re Rapha, firstly, I can't see how they're losing so much, but anyway, if you're losing £15m year after year, wouldn't you call it a day?
Benko is gone from signa then so the rot really is at the top. Fingers crossed that means that splitting off the sports group might give them chance to save some or all of the group.
Ralpha must be making a profit – flogging a top that costs £5 to make at £100 is a great business
Don't know what they are like these days but the last things I bought from them - a winter jersey, a summer jersey, a windproof gilet and a winter lightweight jacket are all still going strong after around 8 years of all year round use so they have yet to get any repeat business from me since I bought them all those years ago.
Bought loads of wheels from SS- returned one with a Pacenti rim that cracked, it was rebuilt onto something else, no quibble.
Small update re: orders - ordered some derailer hangers this week and they arrived Friday. All. Good.
Rapha may have a good margin on sales but they also have ridiculous prime city centre stores with tumbleweed blowing through. Doesn't really seem like a sensible model for such a niche product.
Ordered some derailleur hangers and most of the pivot bolts for my sons vitus. All arrived in a day or so but also, surprisingly, all packaged separately!
I've got frame, forks, wheels and other parts, all now with Parcelforce. 2 separate orders placed this week, coming in 5 separate consignments on Monday
flogging a top that costs £5 to make at £100 is a great business
Which £100 Rapha items cost £5 to make, and who makes them? Would be interested in a piece of that action!
Also, would like to know if all their workers are voluntary, rents free, shipping done by mates as a free favour… etc. Also if they’ve found a cost free way to work around all the Brexit barriers hitting the likes of CRC/Wiggle and everyone in the niche world of cycling that needs a wide geographical customer base.
But when sanity returns I quite fancy making some nice new pedals
Please be a clipless mechanism with a nano body.
It’s much more interesting than joining the race to the Bottom cycle industry at the moment.
Regrettably when the bike industry gets there there will be another industry queuing up to commit hari-kari.
Someone in my family lost their job in the Wiggle / CRC warehouse location in Wolverhampton - not a nice end to 2023 for him....
Neil / Superstar you really seem to be derailing this thread as people pick you up on some contradictions and strange musings (Why not comment as just Neil, repping Superstar is irrelevant surely?) and I cant help do it myself as you say you don't want to join the 'race to the bottom' but then post up pictures of you re-making chainrings whole selling them off for 30% off for less than £25.00 - isn't that joining in by definition?
The reality here is CRC etc wont be the last to fall due to current circumstances and I don't think this is industry specific, a few friends are saying their work is deathly quiet right now, the covid money has ran out now and the warehouse shelves are full of goods.
Going to be a difficult 2024 overall I feel.
This is again de-railing the thread a little but nowhere did I say you were posting as SS to increase sales (Though no other business owner is here commenting in this manner, so it may be having that effect?)
You can post as Neil as much as you like without mentioning SS - you are an individual aside from company owner - so long as you aren't doing so to deliberately plug your own product while criticising others, which you arent this time, all adding 'superstar' to ever reply is doing is to cause people to comment on your business etc
There is a huge difference between business models but you say the industry is in a 'race to the bottom' and then knock 1/3rd of the price from a product (and others) you are currently manufacturing, not old stock to clear, how isn't that joining the 'race to the bottom' and actually becoming a contributing factor in it?
The drive to discount in order to sell is absolutely going to cause some business to fail, perhaps the most bizarre thing is (If this is also relevant to the cycle world) that we have been told lead-times are increasing on production overseas for parts we use at work due to factories reducing staff numbers and hours, so once all this stock is sold off at bargain prices we may end up with brands struggling to re-stock in a reasonable time frame when required = more financial pressure.
I’m posting as Neil SuperstarComponents
I always preferred Fruit, Tango and your other log-ons 😂
christ the bad experience stories with ss are like, what 15 years ago? Time to move on chaps.
my pedals and chainrings have been spot on and still going strong. headset was a bit crappy though...
back to crc....my hanger order has turned up so it seems business as usual despite all the horrible stuff hanging over the staff
You might take umbrage with what Neil says about CRC wiggle, fine, comment by all means about why he’s wrong and what your opinion is or the facts are
We did, it was him that started some nonsense about us ganging up on him, sorry, trolling because he was talking nonsense about administration and his interpretations of it.
He dug it up, others followed.
Well its obviously cathartic for Neil, now he is a success, to come back on here and discuss the industry he was in for so long, obviously glad to be out of, and at the same time troll a bit the forum that gave him so much grief in the past. Interesting anecdotes as well.
Surprising people still rise to it. I am sure he will drift off at some point and I wish him well.
Considering he is so 'out of' the bike industry its interesting to see social media posts showing him making chainrings and stating shimano etc will be coming soon, followed by selling them off at a sub £25.00 price tag, as I say earlier this is also at odds when Neil claims to not want to be part of a race to the bottom, well if that's not being a contributor I don't know what is.
I have zero issues with SS as a company, honestly I see the events of 10 years or so ago as the mistakes of a young person starting out in business and getting things wrong - Neil you seem to be the kind of guy that gets a bit excited and doesn't think things through before posting online and thus sometimes rubbing people up the wrong way / making little sense.
Its drawn this thread well off topic now anyway so a back on topic question - Has CRC, Wiggle & Hotlines gone into administration or is it just Wiggle at the moment as Pinkbike suggest?
No, It doesn’t help he let’s him self be baited but he [alone] doesn’t, everyone, you included who can’t keep on topic and seems to think bashing Neil or SS on threads that have the square root of fa to do with Neil, his businesses or his products need to walk away.
He made a series of false claims about what happened in the past and got called out for them - and he seems to have it in for me in particular and has had several of my posts deleted when I rebut his lies. He did astroturf on here. thats well known
and he seems to have it in for me in particular
I didnt really read it like that, more that you and MiniTeej (iirc) jumped at the chance to have a pop about something that happened with rocks 15 years ago. But if you feel its all about you crack on. The irony is people who have no memory of that seem to have formed their own opinion, so you really didn't need to drag something up from so long ago.
Back on topic, this post on LinkedIn by the guy who helped set up SSU USA is well worth a read I think. Some interesting insight into what went wrong, as well as some wider thoughts about the state of the bike industry.
CRC, Wiggle & Hotlines gone into administration or is it just Wiggle at the moment as Pinkbike suggest?
As far as I can see Chain Reaction Cycles had become a trading name of Wiggle Limited (down the bottom of the CRC web page).
The fact of Wiggle's administration is now also in the footer of CRC's web page.
My supposition is when the order history/ web changes came through earlier this year there was a transfer of some or all trade from the old CRC opco (I forget what it's legal name was) to Wiggle Ltd and since then Wiggle Ltd has fulfilled orders under both brands via two websites.
The original CRC companies were NI registered if I've found the right ones. Neither yet seems to be in a process. Rules are subtly different there but broadly follow England and Wales.
I've only done the most cursory Companies House check for what I think may (or may not) be the entities involved so hard to be totally sure.
I notice that on the ebay Tri-Sport-Resort they've added (In administration) to the company details. Company being Wiggle.
Theres also a new ebay seller that I think is connected to Wiggle/CRC - Formed in Feb 2023 its carrying pretty much the same as CRC/Wiggle, namely lots off Nukeproof stuff. Called - bmg_Bargains.
https://www.ebay.co.uk/usr/bmg_bargains
I think that eBay seller has just bought a load of stuff cheap from Wiggle to make a few quid. Sam Hill pedals for example - £20 more than I paid this week
I think that eBay seller has just bought a load of stuff cheap from Wiggle
They are Wiggle. I've bought from them before.
CRC and Hotlines are owned by Wiggle. So all in administration.
On a technical point a subsidiary being owned by a company in administration does not automatically make the subsidiary in administration or mean that it is insolvent / must go into an Insolvency process. They very often go together but it cannot be assumed.
Each company has to be looked at individually to see if it meets the tests and if the process is required.
Here as in many cases you've got to be careful as there are trading names (ie names used by a company that don't match it's legal name) and different companies floating around.
That said I've just checked the Gazette this morning and the adverts went in on Friday for administration appointments over two Chain Reaction entities and a Hotlines entity with appointment dates a few days after Wiggle.
@stwhannah - fascinating article thanks for sharing.
Makes you realise just how many innocent victims there are out of this, and for all of the forum squabbling we should spare a thought for them. Most of the job losses are hard working people who were unaware, uneducated or blind to the corporate shenanigans happening above their heads.
The whiplash effect diagram is particularly clear. The vast over reaction to what was ultimately a relatively small, rapid and short lived upturn in demand during the early stages of lockdown make very stark reading. I work for a business whose share price almost doubled overnight to a totally unrealistic and unsustainable level at just that time. We have large corporate share holders who bought at that level for whom I have no sympathy. They (unlike the people working in the business) thought that the pandemic consumer behaviour was a long term shift rather than a short term blip. They bet everything on black, and the ball landed on red, just as the industry’s response to a 10% increase in demand was a 40% increase in stock holding and it is clear from that article that over many years the industry has over reacted to small and short lived demand signals (see 2013 too from that article which resulted in an over supply in 2014, albeit on a different, more survivable scale).
Despite some fairly fundamental economic basic principles, there are some who believe you can squeeze an unnatural return out of a business through means other than genuine demand based growth. Rarely does that work out, but there are many stories of people who tried and it would appear that we can now count the very senior people at Signa amongst them.
We all love to ride bikes, we have our favourite brands and our allegiances. And yet we are mostly blissfully unaware of what lies beneath (or above in terms of corporate ownership).
The article elsewhere on the forum right now about Cotic’s pricing highlights that there are 2 very different sides to the U.K. bike industry and that the consumer is confused. On the one hand there are the upstanding, well intentioned ‘passion project’ brands who struggle to compete on an unlevel playing field. On the other hand there are the brands whose ultimate ownership and structure is governed by people who see cycling purely as a business whose fundamentals were appealing during the unsustainable boom years but are now being burnt (the ‘greed is good’ bunch). Unfortunately many people confuse the 2 camps and wrongly label @Cy’s need to increase price as the pursuit of unreasonable profit vs the likes of Signa. Don’t tar everybody with the same brush. @Cy is having to charge sustainable prices which look high vs the likes of Signa’s brands who have been charging prices that were only possible due to some very complex and ultimately flawed macro economic decisions. I have always favoured giving my money to smaller boutique brands and I guess the events of the last few weeks have only served to reinforce my commitment.
A very sobering tale. I have ridden mountain bikes seriously since 1989. I have witnessed the rise of the sport, the rise of brands and the rapid expansion of cycling as the ‘new golf’. I must admit that I find it hard not to feel a little judgemental and perhaps a little snobbish. As somebody who has witnessed the rises and falls of ‘my sport’, I have stuck by it through thick and thin and it has been a constant source of joy, friendship, fitness (and the occasional forum debate!). I see many familiar faces on this forum who have been around for as long as I have too. Perhaps we are now seeing more of a return to the grass roots, genuine and perhaps smaller scale nature of the industry as the big money concerned only with returning an unsustainable and above-average profit from cycling who see it only as a market rather than a lifestyle make way for more genuine brands more akin to how the industry grew in the first place (the likes of Cotic).
So whilst I take no ghoulish pleasure from Signa’s demise because there are too many ‘little people’ being impacted, I cannot shed a tear for the ‘big people’ whose greed and confidence in being able to game the market has not been rewarded. Maybe this is just the reset that we need in what is ultimately our hobby, our passion and a leisure ‘want’ rather than an existential ‘need’. I have said it before but it bears repeating - this is just a bunch of overgrown kids fannying about on bikes in the woods and left at that level, mountain biking in all of its forms is brilliant!
Thanks for sharing @stwhannah.
I shared another of Jacob's posts a few pages back. He writes well and clearly knows his stuff.
Yeah thanks for that article.
Just one question, were they paying suppliers from employees own credit cards?!?
were they paying suppliers from employees own credit cards
Looks like that might be the case, but there's always more to it than that, and the definition of 'supplier' can mean many things.
The most obvious is a supplier of goods (ie the brands supplying bikes and bikes parts). In general these are bought through the usual purchase order and payment route.
However, there are also suppliers of services. Some social media brands for example require payment up front, and this often means credit cards. In the absence of a corporate credit card (which the article highlights retrospectively should have been a red flag), staff used their own cards.
Sometimes staff are happy to do this since it builds their own personal credit and many earn huge rewards (air miles etc) from making huge corporate purchases which far exceed what a normal personal spend would give. They then claim the value on expenses which in good times all works out well. In bad times, those same suppliers now have their personal card details on file and continue to charge them, regardless of whether the employee is being reimbursed by their employer.
Sounds somewhat shadier than it really is, but it is one of those knock on effects that also hits the 'little people' hard. I am pretty sure that the 'big people' never handed over their own credit card details for social media purchases!
At the risk of sounding like a lawyer, businesses should always operate as if they are in the bad times, but most have an overly optimistic approach and assume that the good times will continue indefinitely. Good working practice is good working practice, regardless of the circumstances and vice versa. Putting stuff on staff credit cards works well on the surface for everybody whilst the cash is flowing. As soon as it isn't, it is the employee, not the employer that suffers.
Yeah that was what I assumed.
That's mental!
I wouldn't say that it's normal practice in a start-up, but it's definitely not unusual.
Oh in an actual start-up, sure, I can see it. Daft but plausible.
In a business with several billions of capital backing though?
Oh in an actual start-up, sure, I can see it. Daft but plausible.
In a business with several billions of capital backing though?
That was the overall group, the US subsidiary was very much a start-up.
As the blog says, in hindsight it was a red flag. But if it's been like that from the start then one might not notice it as such.
Back on topic, this post on LinkedIn by the guy who helped set up SSU USA is well worth a read I think. Some interesting insight into what went wrong, as well as some wider thoughts about the state of the bike industry.
It's a really interesting read.
The point he makes about making bikes being essentially a marketing driven low margin commodity business, with more than a few romantics making irrational decisions and very little true innovation makes a lot of sense to me.
Fitting asbestos in buildings seemed like a good idea.....until it wasn't. As I said, people don't tend to question things in the good times. It's only when things go wrong that questionable things actually get really questioned. Imagine you are the employee of a multi billion dollar business and don't really understand the complex and frail network of financing propping it up. Your boss asks you to do something that you don't feel the need to challenge (because it's a multi billion dollar business in a boom market right?!). Happens all the time sadly.
Hindsight is very much 20:20, and whilst it all feels very wrong when written as just one aspect of a multi facetted downfall, it sadly isn't unique to Signa.
Corporate best practice is littered with things that you wouldn't dream of doing with your personal finances and is basically professional gambling except the money isn't yours to lose.
Would you for example sell your house to somebody who pays you in shares of that house rather than cash? Furthermore, the value of those shares actually only get realised if you sell that house for twice what it is worth today in 5 years time? In the meantime, you get nothing but a promise and somebody uses your house for free for 5 years and unbeknown to you rents it out as a crack house and actually destroys its value. Furthermore, there's absolutely nothing you can do about it because you no longer legally own it, despite being financially on the hook if it all goes wrong because the new owners don't own the house either but have sold it for £1 to a holding company who might at any moment withdraw their support for paying the mortgage that you are still legally responsible for. Thus the people you sold your house to have effectively paid you nothing, offloaded the risk, but stand to make a small fortune if by some stroke of luck it really is worth 5 times what they 'paid' you for it, whereas you stand to only gain what they originally promised you, having taken on a massive risk and having lost the one thing that you worked for years to buy, renovate and raise your family in (none of which 'emotional nonsense' matters to the people you sold it to).
Welcome to world of PE and corporate takeovers!!!!
Be carefull out there
French subsidary Probikeshop has stopped shipping to clients about a week ago.
Bikester(which I believe shares a warehouse ith above) now mentions on lot of stuff we can temporarily not offer this product for sale.
To be followed.
Wow that LinkedIn article is fascinating - well worth a read - having also just been reading about Rapha and their plight, it helps you understand the structure and the pitfalls of the industry -
it very much reminds me of my own experience I s the telecoms industry at around 2001-04 - similarly, we should have “turned back when the weather was coming in” - but sadly we didn’t!