Possible demise of CRC / Wiggle

Alternatively - a CRC is probably what you need for an overstocked industry, and a focus there underlined by the promotion of the eCommerce guy.

I’m looking forward to the deals all this overstock should produce

Theyre on at the moment chrismac

Anything nukeproof, vitus and ragley is super cheap

Indeed the 50% off Ragley Marley is worryingly tempting

No sympathy, the overcharging during the COVID boom has come back to bite them, those prices were never sustainable.

It's been said a million times on here on other threads, but an overstock and website redesign of a much less user friendly website is a bad combination

CRC wiggle weren't overcharging during the pandemic so I don't know where you got that from @airvent

It's a bit like booking a ferry to IOM when the TT is on and wondering why it's 10x more expensive.supply and demand.

Anyhow CRC wiggle isn't going anywhere yes they need to clear excess stock and turnover is down but compared to the rest of the cycling world there doing ok .

It's there other umbrella parties they will pull the plug on.

The one big shock is the Vitus brand will likely be killed off/shelved with nukeproof brand remaining

I read this yesterday, very interesting but absolutely nothing in it to support the thread title IMO.

Unless any of the forum's finance-y types care to correct me?

Good to hear we'll still be getting cheaper gear next year, but my drawers are pretty full of bargain stuff already.

The one big shock is the Vitus brand will likely be killed off/shelved

That would be surprising, it's not mentioned in the article that I can see though?

TBH that sounds more like a return to business as normal. I'd be more worried if I was an LBS or small mail-order shop. The silver lining of the last 3 years has probably been the complete lack of grey-market stuff at CRC et.al available with next day postage. People had kinda got used to paying RRP and having to wait for stuff.

The one big shock is the Vitus brand will likely be killed off/shelved with nukeproof brand remaining

Would it?

I think my Escarpe is great, but it's hard to see why it needs to exist as a separate model line next to Nukeproof and Ragley other than to give the impression of a choice. Weirdly though the Vitus bikes always seem much better value:
Entry level Escarpe - Carbon, 12-speed shimano, £1800
Entry level Reactor - Alloy, 10 speed microshift, £1800
The rest of the spec is much of a muchness.

But as above, it doesn't actually say that anyway unless there's another press release somewhere.

Nowhere in that article does it mention the demise of CRC?

Weirdly though the Vitus bikes always seem much better value:

When was the last time you saw a vitus race team etc?
Also it's purely a house brand so there is no additional margin built into the pricing to allow your LBS to sell them and do pesky things like eat and sleep indoors.

When was the last time you saw a vitus race team etc?

They sponsor Kyle Strait, Joe Smith and various lower-profile racers - as well as quite a few "influencers".

And they were lead sponsor for at least one road race team.

But yeah, they're spending a lot less than NP on that side of things.

Unless any of the forum’s finance-y types care to correct me?

Delisting is never a good sign. It can be a simple cost saving exercise, being on the NYSE is not cheap, but more often its forced onto the company due to them no longer meeting the minimum requirements. Such requirements set against basic metrics that could be used to determine a companies health. Or put another way, many delistings are because the company is in trouble. Again to reiterate, that may not be the case here, it's perfectly valid to delist if you want to save all those costs of being listed, if for example no ones trading your shares anyway, why bother?

I’d be interested to know their costs of maintaining the Nukeproof DH race team. I suspect it isn’t cheap and if it were my business, unless I could see the direct and tangible link to sales from the profile it creates for the brand, it would be on my hit list if needing to reduce costs.

I think my Escarpe is great, but it’s hard to see why it needs to exist as a separate model line next to Nukeproof and Ragley other than to give the impression of a choice. Weirdly though the Vitus bikes always seem much better value:

You're second point covers it. Vitus are the budget brand (with more conservative geometry) and Nukeproof are the premium brand. Accordingly set at 2 different price points. Ragley are the oddball niche brand that could easily just vanish one day without many people noticing (which would still be a shame)

I’d be interested to know their costs of maintaining the Nukeproof DH race team.

I think I heard a figure of $500k bandied about on a podcast recently, but that may have just been the logistical side (not athlete pay).

I think it's really good for the brand though, especially now Sam Hill's no longer fighting for enduro supremacy.

Ronan Dunne makes their bikes look very capable.

unless I could see the direct and tangible link to sales from the profile it creates for the brand, it would be on my hit list if needing to reduce costs.

It's just part of the marketing budget. You might kill the team but that £500k (or whatever) could be moved to a more an approach with better returns, rather than just being tucked away. I can't imagine that a figure of that magnitude buys you that much advert space when trying to sell across the world

Taking it (or rather the capital investment group funding them) private is a good move. SEC filing is a right pain, makes speculation rife and can thoroughly muck up a business that wants to restructure. If they can knuckle down without the glare of having to publish public forecasts & do quarterly reviews to shareholders it'll make things so much easier for them. They can also refinance at a rate that won't be governed by share price.

I looked at the SSU shares, they've gone from $6 to 9c in a year. Whether or not they wanted to delist, it was going to happen anyway.

chakaping

I’d be interested to know their costs of maintaining the Nukeproof DH race team.

I think I heard a figure of $500k bandied about on a podcast recently, but that may have just been the logistical side (not athlete pay).

I think it’s really good for the brand though, especially now Sam Hill’s no longer fighting for enduro supremacy.

Ronan Dunne makes their bikes look very capable.

They kind of need the marketing for Nukeproof - they were very much a budget brand not all that long ago, just CRC's house brand kit, but they have crept more and more into a premium space and are now flogging 12K Ebikes and carbon frames with push/EXT shocks, etc. They very much want to position themselves alongside the big brands.

It's a tough world out there for all retailers.  I read it that they're just responding to the current market conditions.

SSU stock looks like it's worthless now, down 17% today.
https://www.google.com/search?sca_esv=572520602&sxsrf=AM9HkKnbP1fwyXDGnNTVpCwRvY8dR9T33w:1697023330756&q=NYSE:+SSU&stick=H4sIAAAAAAAAAONgecRowS3w8sc9YSn9SWtOXmPU5OIKzsgvd80rySypFJLmYoOyBKX4uXj10_UNDXMqTItyi3LKeRaxcvpFBrtaKQQHhwIAzeOowkkAAAA&sa=X&ved=2ahUKEwjKnLjG8O2BAxUoXUEAHdQEAsQQsRV6BAhqEAM&biw=1687&bih=1214&dpr=1

I can hold my head up high .  My £169.99  to the CRC ragley safeguard fund must of helped .

You’re second point covers it. Vitus are the budget brand (with more conservative geometry) and Nukeproof are the premium brand. Accordingly set at 2 different price points.

Do they actually come out of two entirely different R&D offices though? And with two different procurement guys going to SRAM/Fox/Shimano?

On the other points (just comparing the reactor and Escarpe as they're the closest, the Mega has 20mm more travel, the reactor 10mm less):
The "budget brand" Vitus is carbon
The vitus is slacker HA
The vitus has a steeper SA
The reach is within 2mm
The RRP is practically the same

When was the last time you saw a vitus race team etc?

Yes that costs, but if your marketing budget doesn't give you a return on investment it's poorly spent. The race team might cost £500k, but unless it's a vanity project that should be paid back in extra sales.

And as mentioned by others, Vitus have several racers/riders and a road team.

Also it’s purely a house brand so there is no additional margin built into the pricing to allow your LBS to sell them and do pesky things like eat and sleep indoors.

Maybe true, but they're still CRC's in house brand (and provide most of the finishing kit for the Vitus).

I assume that they'll have to keep one in-house bike brand in order to buy Shimano, SRAM etc at prices they can still sell at and make money.

NEW YORK--(BUSINESS WIRE)--The New York Stock Exchange (“NYSE” or “Exchange”) announced today that the staff of NYSE Regulation has determined to commence proceedings to delist the two securities enumerated below (“Securities”) of SIGNA Sports United N.V. (the “Company”) from the NYSE. Trading in the Company’s Securities will be suspended immediately.

The Company has a right to a review of this determination by a Committee of the Board of Directors of the Exchange. The NYSE will apply to the Securities and Exchange Commission to delist the Company’s Securities upon completion of all applicable procedures, including any appeal by the Company of the NYSE Regulation staff’s decision.

Confirmation that it was indeed not necessarily a choice on the part of SSU.

Do they actually come out of two entirely different R&D offices though? And with two different procurement guys going to SRAM/Fox/Shimano?

I'd wager it's all the same place for R&D and manufacture (definitely sales and distribution). Different brands, same company, different markets (similar to the the different brands in the VAG group working in different markets to get a bigger overall share)

Sure I saw it said that the Vitus frames are just off the peg catalogue jobs? I'd imagine the Nukeproof and Ragley frames cost a bit more to manufacture? My Ragley was certainly a much better built and finished frame compared to my friend's Vitus.

Not sure about the other models, but when I saw the nukeproof ebike up against the Vitus E-sommet, the tube profiles looked very very similar, so I'd expect considerable manufacturing overlap.

When was the last time you saw a vitus race team etc?

Can't say I have, but I did notice there's one being ridden at Rampage.

Aren’t SSU majority owned by private equity?

I think the thread title is wrong: the Wiggle takeover was the demise of CRC. It went downhill fast (and not in a good way).

Sure I saw it said that the Vitus frames are just off the peg catalogue jobs?

Some of the road and gravel bikes may be, and maybe some of the cheap hardtails (and that xc FS bike), but I'm sure the Sommet and escarpe are bespoke to them.

Neil from SuperstarComponents. Note these are just my opinions based on publicly listed information, don’t hold me to this.

looks bad. Very bad

If a corporate says they have severe liquidity problems publicly they are unlikely to be in a good place!

Last I read CRCwiggle group lost £90 odd million last financial year and made some bonkers excuses about it sploshing tens of millions on a website (how? Incompetence?)  I suspect this years financials will be considerably worse if it ever comes out.  Look at companies house and there’s the usual schenanigans of multiple companies shifting losses around

They are clearly dumping stuff like crazy for cash flow. Lots of stuff sold well below manufacturing cost. Flogging £55 chainrings for £8 for example

looking at the claims Signa was delisting of its own choice then the NYSE saying they were delisting them looks even more shady. A rather clumsy attempt at PR brushing over a shitstorm. In a nutshell the company has lost 98.5% of its entire value in a single year, this doesn’t point to health!

market cap of $35 million according to google. That could evaporate in days if contagion digs in. It reflects the sheer amount of money burning and debt at risk if you annihilate a few billion dollars in market cap in under a year!

so does this mean loads of bargains? Well they are flogging them now and I doubt they are ordering more stuff to replace it.

taiwan bike factories are working 2 day weeks as demand has nosedived. This doesn’t mean cheaper prices it means they aren’t making anything!

what might happen next? Well these big companies are based on debt funding. So everything’s hunky dory till your lender pulls the money and you go pop instantly. If your bank has lost 98.5% of its value in a year I doubt it can raise more money to burn.

wont be the first or last. It’s going to be an interesting year…

There's a few videos on YouTube touring the offices and talking about the design of their full suss frames. Maybe an elaborate rouse but seems genuine.

The race team might cost £500k, but unless it’s a vanity project that should be paid back in extra sales<br /><br />

I imagine it costs a lot more than that to run a dh team even excluding the riders salaries. There’s alot travel costs, team staff and vehicles to fund 

Didn't an ex CRC employee post a scathing letter on social media a few months outlining how badly things had gone wrong there?

Didn’t an ex CRC employee post a scathing letter on social media a few months outlining how badly things had gone wrong there?

Probably. I'm sure if you looked you'd find an employee of Starbucks or McDonald's telling you the same and how the business was going to go bust in a year.

Most people in a business of that size haven't a clue what is going on because it's simply nowhere near their job. If its their ex FD writing that letter it might have merit, if its one of their web designers or warehouse staff, probably not, it's just their timing makes them look like a savant.

It was someone senior. I'm trying to find it but it basically said the Wiggle merger had been an absolute disaster

It was someone senior. I’m trying to find it but it basically said the Wiggle merger had been an absolute disaster

Wonder if that opinion was predicated mainly on the their job being duplicated and thus made redundant. They might have been absolutely right, but likely they just had an axe needed grinding.
They seem to have done just fine for the five or six years since the merger up to 23. Covid bubble might hide some of that of course but equally 22/23 is not a good time to be significantly in debt or in certain industries. There will be a lot of otherwise viable businesses in multiple sectors gone by the time all of this blows over.

Sure I saw it said that the Vitus frames are just off the peg catalogue jobs?

A long time ago. They're very much designed by Chiggle now.

said the Wiggle merger had been an absolute disaster

When Bridgepoint bought them in 2011 it paid £180m (well over a 10x sales valuation) and had to beat off several interested buyers. When Signa bought Wiggle/CRC from Bridgepoint it settled over £300million in external shareholder and Bank debt..

had to beat off several interested buyers

There was stiff competition, eh?

"There was stiff competition, eh?"

Survival of the stiffest.

Bunch of children 🤣

There’s a few videos on YouTube touring the offices and talking about the design of their full suss frames. Maybe an elaborate rouse but seems genuine.

One thing that was mentioned on the owners group is the Escarpe and Sommet share a front triangle, which is entirely believable as the Escarpe head/downtube looks comically overbuilt with a 34mm fork.

How companies go from success to self inflicted suicide is often a retrospective article on the FT or a Radio 4 podcast. It's both fascinating and sad to watch in real time via the medium of the company website.

One thing that was mentioned on the owners group is the Escarpe and Sommet share a front triangle, which is entirely believable as the Escarpe head/downtube looks comically overbuilt with a 34mm fork.

Carbon molds cost a lot. If you can use the same molds with new layups and inners to give different weights/rides then you can save a ton of money.

When Bridgepoint bought them in 2011 it paid £180m (well over a 10x sales valuation) and had to beat off several interested buyers. When Signa bought Wiggle/CRC from Bridgepoint it settled over £300million in external shareholder and Bank debt..

Isn't that how private equity works? A PE company buy CRC, get CRC to pay for the loan for itself while the PE company strip out anything of value, often leasing property of other assets back to CRC at an inflated rate. Eventually CRC can't handle the debt burden anymore and it either gets sold (to another PE firm to rinse a bit more value out of it) or liquidated.

Perhaps I am just a bit cynical about it all.