Possible demise of CRC / Wiggle

@tjagain

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.

https://www.linkedin.com/pulse/postmortem-signa-sports-united-jacob-dudek-xau9f?utm_source=share&utm_medium=member_mobile_web&utm_campaign=copy

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.

CRC and Hotlines are owned by Wiggle. So all in administration.

Keep it on topic please. 

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?!?

Solarider. That exactly is my point. I hope people listen to you. 

Neil SuperstarComponents 

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.

https://www.linkedin.com/pulse/postmortem-signa-sports-united-jacob-dudek-xau9f?utm_source=share&utm_medium=member_mobile_web&utm_campaign=copy

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!!!!

Yeah I know it’s the overall group but it just seems crazy that folk wouldnt question that sort of thing. Or is that another example of US work practices that the rest of the world would quite rightly tell them where to go?

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!

Update: Placed an order on Sunday, delivered today. In the box was the tool I ordered and a bag a Haribo!

I ordered a set of jockey wheels on sunday, they turned up yesterday – but no haribo!

So Halfords have said that they and Tredz will honour any Wiggle & CRC warranties on parts and accessories (dosent say if that includes Wiggle’s own brand parts and accessories)

They have also said that they will offer all Wiggle+ subcribers a free £15 voucher

https://road.cc/content/news/halfords-honour-wiggle-chain-reaction-warranties-304971

That’s great. Presumably that’s manufacturer’s warranties, yes? In which case it won’t be own/house branded stuff, including Vitus/Nukeproof/Ragley bikes.

That’s why we’re announcing today that if you’ve bought parts or accessories, covered by warranty from a retailer that is no longer trading, Halfords will honour the warranties.

Our Halfords and Tredz teams are working hard to see how we can support people who may be affected… We don’t want anyone to be left with worthless parts or accessories through no fault of their own…

Halfords to support Wiggle customers with warranties and money off vouchers

Reading the linkedin article it becomes clear why there were sudden dumps of huge bargains over the last year or so!

So Halfords have said that they and Tredz will honour any Wiggle & CRC warranties on parts and accessories (dosent say if that includes Wiggle’s own brand parts and accessories)

Many lbs stores have been honouring sram/shimano/Bosch and many other warranties for stuff bought elsewhere for years. Nice of Halfords to finally catch up I guess.

Many lbs stores have been honouring sram/shimano/Bosch and many other warranties for stuff bought elsewhere for years. Nice of Halfords to finally catch up I guess.

So do we think they’re just after getting people in their stores here?

I did think “honouring” was an odd choice of wording. “Processing warranties” would have been more accurate, eh?

Many lbs stores have been honouring sram/shimano/Bosch and many other warranties for stuff bought elsewhere for years. Nice of Halfords to finally catch up I guess.

and many will turn you away or want to charge if you didn’t buy the product from them. Nice of Halfords/Tredz to give a clear commitment I think.

Nice of Halfords/Tredz to give a clear commitment I think

To be fair it’s clear as mud at the moment. I mean if nukeproof disappeared and your frame snapped would you expect Halfords to replace it? With what? It’s a fair comment that not all shops will do it, but that still doesn’t make this anything new or unusual in the bike shop world.

Surely that’s just Halfords playing the marketing game. Look good to everyone with a statement and hopefully not spend very much carrying out the action so they win overall by improving their public perception?

I’m just hoping they add a discount code in the next few weeks so I can buy a bike I’m eyeballing.

Slightly off topic, but I needed a SRAM 12 speed chain this week. I would normally go to CRCWiggle but googled instead, best price was Halfords (and British Cycling discount too) and they’ve got stock in the store just down the road from work. Pop down to the store it’s priced at £28 on the shelf not £19 as per the website. They were happy to price match to the website, so all fine, but being a tight arse makes me think I need to price check everything to websites when I go physical shopping.

Ordered yesterday and it’s already with Evri, I’ve made so many orders recently the courier is probably sick of the sight of me, yet still not a single bag of Haribo, wtf ?.
I don’t think I’ll be bothering my local Halfords with any warranty issues, every time I’ve gone to pick up an order it takes a group effort, it’s like the 3rd or 4th person finally knows what I’m on about, I’ll initially try upstairs in the bike section, no try downstairs, no try upstairs, I just have, oh, goes to find someone else, its a total farce.

Once the haribo stops, then we know the real trouble has started.

Ordered some new wheels (Nukeproof & DT Swiss), turned up 24hrs later…. never had it so quick from CRC before 🙂

I’m just hoping they add a discount code in the next few weeks so I can buy a bike I’m eyeballing.

If it’s not cheap enough already, then you don’t need it… The likelihood of it being there in a few weeks one way or the other is absolutely minimal I would suggest.

yet still not a single bag of Haribo, wtf ?.

Once the haribo stops, then we know the real trouble has started.

they turned up yesterday – but no haribo!

I do very much hope that I am missing some obvious irony here right now, because the overwhelming fact that hundreds of people stand to lose their jobs directly or indirectly as a result essentially of SSU’s value being grossly overstated (in much the same way that Donald Trump is facing $250m+ of fines right now in the US and probable time in jail) is looming rather more heavily with me than he fact that 50p’s worth of sweets weren’t included as a freebie in peoples (below cost price) vulture purchases recently…

@stwhannah – fascinating article thanks for sharing.

Couldn’t agree more. So very sad to read, but fascinating how such manipulation was allowed to happen! I am no financial institution expert, but knowing the business, it’s model, it’s typical stock holding and looking at its most recent accounts I would have put the value of the business around $250-500m at most… The 46x EBITDA value of $3.2Bn was absolutely absurd and should never have been allowed to happen! My Dad who knows far more about this kind of topic than I do said that 7-10x EBITDA for a business valuation would be classed as incredibly generous usually, and that my $250-500m guesstimate would have been far more realistic at the time the business went public.

Dudek’s assertion that the ¢150m equity commitment never really existed is quite telling sadly!

I received a refund on a return yesterday. It all went through without a problem.