Wiggle and Chain Reaction gone into administration.

[mitchibob]

Bit of a shame, as they were mostly good (just didn't like how fast they'd start 'picking' order so you couldn't cancel when you got something wrong, and realised seconds later, and then had to return, that must've cost them too with number of very convenient returns). How tied in is dhb? as some of their products were great. Personally, was never a fan of haribo packs they included in every delivery, but came in handy when accidentally answering door during halloween last year so could get rid of them all.

 

[Jameshow]

https://news.sky.com/story/frasers-looks-to-ride-to-rescue-of-online-bike-retailer-wiggle-12994213

@Kell did you put this in 'folding bikes' as a pun? Or....

Commited customer base!
Not if Mike Ashley buys it!!

 

[bonzobanana]

Mapil Top co which also has links with Peloton by way of owning their share capital is in administration too which means that Peloton will be next.

Unfortunately Signa has killed the entity through charging acquisition costs through to the I&E and then riddling the company with debt. The new website also cost circa £8m! Gulp!!!

I think Signa bought them from Bridgepoint Equity in the cycling boom year of 2021 so paid a huge price and now of course Signa is going down the pan taking Wiggle/CRC with it. Same as Moore and Large where the original family owners sold it when its market value was sky high and that pretty much destroyed the company when the market went downhill and they were saddled with debt.

Mike Ashley taking over Wiggle/CRC possibly should be a good thing although I can see customer service suffering badly but at least many jobs being protected. If his group does of course. Mike Ashley is good at controlling costs and creating a margin for what is sold even if that margin is small. Where as many retail companies will loss lead and not protect their margin.

I've bought quite a few items from Sports Direct over the years and all have been amazing value but always dreaded the thought of having to deal with their customer services.

Lots of German companies seem to have huge debts, borrowing seems to be easier for them, they often run close to the maximum debt allowance and then when the market heads south it can take them over the edge. Volkswagen's debt is larger than the whole of South Africa's economy at something like £180 billion, they have fields of 10s of thousands of unsold cars or unsellable cars and often reliability surveys show very poor reliability, very high repair costs and the most likely to have engine and transmission failures that write off the vehicles. They are garbage products bought by those vulnerable to marketing. I see Volkswagen are looking to increase their margin from about 3% to 6.5% so they can manage their debt level so they are going to push for more premium pricing on what is often an appalling product. This is just when Chinese brands are just getting a strong foothold in the European market and China has just overtaken Japan as the largest car manufacturing nation in the world. Most German car companies have huge debts, like Mercedes and BMW but I think the German government acts as guarantors on these debts to prevent their closure. Anyway the point is Signa probably pushed their luck with the level of debt and with a market downturn and interest rate rises it was unsustainable.

 

[bonzobanana]

Bit of a shame, as they were mostly good (just didn't like how fast they'd start 'picking' order so you couldn't cancel when you got something wrong, and realised seconds later, and then had to return, that must've cost them too with number of very convenient returns). How tied in is dhb? as some of their products were great. Personally, was never a fan of haribo packs they included in every delivery, but came in handy when accidentally answering door during halloween last year so could get rid of them all.

You don't like low grade boiled sheep skin with sugar and colourings added?

 

[Kell]

https://news.sky.com/story/frasers-looks-to-ride-to-rescue-of-online-bike-retailer-wiggle-12994213

@Kell did you put this in 'folding bikes' as a pun? Or....

I’d not even thought of that. LOL.

No, just I hang out here mainly as my folder is the bike I ride most often.

 

[PK99]

And it could get worse....

https://www.cyclingweekly.com/news/...-reaction-floods-market-with-discounted-stock

 

[bonzobanana]

And it could get worse....

https://www.cyclingweekly.com/news/...-reaction-floods-market-with-discounted-stock

I think they have been selling a lot of stock before administration at extremely low prices in the last six months. In fact if anything I think their current prices have stabilised up a bit. I've bought a few things in the last six months. There was a code for £10 or £15 off £75 and also you could go through topcashback for extra money back. They were selling Suntour forks that had a full RRP of £200 for £20 and many other heavily discounted parts like inner tubes for £1 which were often £6 elsewhere.

I believe when Signa took them over in 2021 they already had huge debts and now that they are in administration the brand may be bought cheap with those debts mostly written off. A relaunch perhaps by the House of Frasier group if they buy it could still be very competitively priced. Also Frasier Group has so many cycling retailers under its belt with Evans, Sports Direct and various online retailers like Studio and I'm sure many others I'm not aware of they will have huge buying power to negotiate big discounts from Asian factories. I mean what if HOF got their s**t together and really integrated their bicycle business into one buying entity that created different tiers of products for all their retail brands so Studio would pretty much only sell their entry level models but Evans would sell the full range etc. I can see this taking on Halfords very successfully and the UK becoming dominated by 2 giants of cycle retailing for low to mid-range bikes with only scraps left for independent bike shops to sell higher cost more esoteric bikes that are really a niche in the market place. What if Studio did a £2k carbon fibre road bike with full electronic Shimano 105 with easy payment terms that matched everything available from independent bike shop bikes in spec but without a recognised international brand. I personally have zero loyalty to brands I focus on spec for the price. I have zero interest in paying a huge amount extra for a big US, Italian or German brand slap on a Asian bike. What if high quality Vitus or Nukeproof models turn up in Sports Direct stores or online at Studio?

What happens when a retail chain like Wiggle/CRC with a huge amount of knowledge about bikes but no real talent in controlling costs and protecting their margin meets Mike Ashley who is clueless about bikes but knows how to control costs and protect a profit margin?

 

[tinywheels]

mmmm, whatever happened to kwik fit bike servicing?
Not sure if large entities running things is a good thing.
I think the way the bike market is heading needs a whole new way of doing things.
New players are needed in the market.
Car companies are aware they need new buisness models. A disruptor is required to shake things.

 

[cyberknight]

I think they have been selling a lot of stock before administration at extremely low prices in the last six months. In fact if anything I think their current prices have stabilised up a bit. I've bought a few things in the last six months. There was a code for £10 or £15 off £75 and also you could go through topcashback for extra money back. They were selling Suntour forks that had a full RRP of £200 for £20 and many other heavily discounted parts like inner tubes for £1 which were often £6 elsewhere.

I believe when Signa took them over in 2021 they already had huge debts and now that they are in administration the brand may be bought cheap with those debts mostly written off. A relaunch perhaps by the House of Frasier group if they buy it could still be very competitively priced. Also Frasier Group has so many cycling retailers under its belt with Evans, Sports Direct and various online retailers like Studio and I'm sure many others I'm not aware of they will have huge buying power to negotiate big discounts from Asian factories. I mean what if HOF got their s**t together and really integrated their bicycle business into one buying entity that created different tiers of products for all their retail brands so Studio would pretty much only sell their entry level models but Evans would sell the full range etc. I can see this taking on Halfords very successfully and the UK becoming dominated by 2 giants of cycle retailing for low to mid-range bikes with only scraps left for independent bike shops to sell higher cost more esoteric bikes that are really a niche in the market place. What if Studio did a £2k carbon fibre road bike with full electronic Shimano 105 with easy payment terms that matched everything available from independent bike shop bikes in spec but without a recognised international brand. I personally have zero loyalty to brands I focus on spec for the price. I have zero interest in paying a huge amount extra for a big US, Italian or German brand slap on a Asian bike. What if high quality Vitus or Nukeproof models turn up in Sports Direct stores or online at Studio?

What happens when a retail chain like Wiggle/CRC with a huge amount of knowledge about bikes but no real talent in controlling costs and protecting their margin meets Mike Ashley who is clueless about bikes but knows how to control costs and protect a profit margin?

LBS has said it could buy things from wiggle cheaper than they could from their wholesale supplier and we wonder why they are making a loss ?

 

[vickster]

mmmm, whatever happened to kwik fit bike servicing?
Not sure if large entities running things is a good thing.
I think the way the bike market is heading needs a whole new way of doing things.
New players are needed in the market.
Car companies are aware they need new buisness models. A disruptor is required to shake things.

It was never Kwikfit doing the servicing aiui but an independent called Fettle using their premises, they are at two branches in London and one in Bristol
https://www.fettle.cc/workshops

 

[bonzobanana]

LBS has said it could buy things from wiggle cheaper than they could from their wholesale supplier and we wonder why they are making a loss ?

Lots of big companies buy stock from non-official suppliers. If you are large enough you could buy OEM Shimano parts from a distributor in China, Vietnam or Cambodia, it will be cheaper as OEM so no retail packaging and then cheaper still because its being sold in a ultra competitive country with lots of bike assembly and manufacturing plants so the price is exceptionally low. Then stick it all in a container on a container ship to the UK where you can massively undercut any small retailer and make a healthy profit or even sell with a small profit. Small businesses don't have the resources to buy from Asia themselves so are reliant on the official stock channels. I don't know the details of Wiggle/CRC failings but I feel once they had grown so much they should have spent time stabilising their business to pay off some debts but instead they kept going with massive growth and slim margins causing debt. The bigger a business is the more economies of scale but still that only works to a point. They did such brilliant work getting Vitus and Nukeproof established as great quality, great value brands it would be a shame that went to waste.

If I was Wiggle/CRC and Shimano in Asia were reluctant to sell my company OEM stock that would be sold as a grey import and I was buying from Asian bicycle factories anyway I would come to an arrangement with such a factory to buy additional OEM parts so both the factory and my company had more buying power which I'm sure they would be happy to do, to help lower their prices especially if you are buying bikes from that factory anyway. It's a no brainer. You would do everything to lower your costs and increase your margin especially when there is zero sacrifice in quality. It's the same Shimano parts made in the same factories.

 

[Jameshow]

I think they have been selling a lot of stock before administration at extremely low prices in the last six months. In fact if anything I think their current prices have stabilised up a bit. I've bought a few things in the last six months. There was a code for £10 or £15 off £75 and also you could go through topcashback for extra money back. They were selling Suntour forks that had a full RRP of £200 for £20 and many other heavily discounted parts like inner tubes for £1 which were often £6 elsewhere.

I believe when Signa took them over in 2021 they already had huge debts and now that they are in administration the brand may be bought cheap with those debts mostly written off. A relaunch perhaps by the House of Frasier group if they buy it could still be very competitively priced. Also Frasier Group has so many cycling retailers under its belt with Evans, Sports Direct and various online retailers like Studio and I'm sure many others I'm not aware of they will have huge buying power to negotiate big discounts from Asian factories. I mean what if HOF got their s**t together and really integrated their bicycle business into one buying entity that created different tiers of products for all their retail brands so Studio would pretty much only sell their entry level models but Evans would sell the full range etc. I can see this taking on Halfords very successfully and the UK becoming dominated by 2 giants of cycle retailing for low to mid-range bikes with only scraps left for independent bike shops to sell higher cost more esoteric bikes that are really a niche in the market place. What if Studio did a £2k carbon fibre road bike with full electronic Shimano 105 with easy payment terms that matched everything available from independent bike shop bikes in spec but without a recognised international brand. I personally have zero loyalty to brands I focus on spec for the price. I have zero interest in paying a huge amount extra for a big US, Italian or German brand slap on a Asian bike. What if high quality Vitus or Nukeproof models turn up in Sports Direct stores or online at Studio?

What happens when a retail chain like Wiggle/CRC with a huge amount of knowledge about bikes but no real talent in controlling costs and protecting their margin meets Mike Ashley who is clueless about bikes but knows how to control costs and protect a profit margin?

Sounds like a race to the bottom and the enthusiast will go else where.

The middle players will get a boost imo.
Wheelbase, all terrain, chevin cycles, Hargreaves (insert other regional players) etc will see a boost in sales as people put their money into safer harbours.

Perhaps even into the LBS if they can get stock at a reasonable price.

 

[bikingdad90]

I was in my LBS yesterday and he was saying he expects many shops to win back business they lost because of wiggle and a boost in total margin on consumables and parts as more are sold through LBS.

 

[bonzobanana]

I was in my LBS yesterday and he was saying he expects many shops to win back business they lost because of wiggle and a boost in total margin on consumables and parts as more are sold through LBS.

I personally can't see it but I guess there are lots of regional variations. The UK is becoming a much poorer country.
In a economy getting poorer, taxation will rise and disposable income will fall for everyone.
This all effects how much money is swilling about in the economy. I totally accept that the very rich can be unaffected and so sometimes high end consumer products like top end bikes could still sell but the vast majority of consumers will be looking for more value. Then factor in the cost of global warming and environmental issues which have a financial impact too. Extreme weather etc.

I feel there will be a greater need for bike servicing in the future as more people continue with existing products rather than replace and this could be the positive outcome for local bike shops that keeps them more commercially viable with a downturn in spending on new consumer products. As a country we really need to have many more tax incentives for refurbishing and repair of products including bicycles. I certainly feel like lowering the taxation on bike shops that repair and refurbish bikes is important. However for new products perhaps sales taxation should increase to curb the high level of imports.

 

[NorthernSky]

real shame this, i've used Wiggle CRC for years and have found them a great online retailer.
maybe they can be saved but we'll have to see