Wiggle Chain Reaction Cycles parent company suffering 'severe liquidity challenges'
Retail giant Signa Sports United cites its 'bike segment' brands as underperformers
Signa Sports United (SSU), the parent company of online retailer Wiggle Chain Reaction Cycles, has announced its intention to restructure and delist from the stock exchange, citing “severe liquidity and profitability challenges”.
The decision comes after the e-commerce giant noted a continued lag in demand for its products in the first nine months of 2023. This demand has remained “significantly below 2022 and pre-pandemic levels”, according to a company statement.
As a result, SSU will begin a review of its operating model, which it says will include the “termination or winding down of non-performing assets”.
The Berlin-based company has also decided to delist from the New York Stock Exchange, where its share price has fallen dramatically in recent years. In December 2021, the price was $9.21, but has since fallen to $0.89, per September 2023’s figures.
SSU’s delisting is expected to become effective later this month.
A company statement said: “Since announcing FY23 guidance, operating performance, particularly in the bike segment has continued to lag management expectations.
“As the company enters FY24, it is the belief of SSU management that the market disruptions associated with market overstock are likely to persist into late FY24 and will adversely impact the company’s ability to achieve its near-term growth and profitability targets.”
Get The Leadout Newsletter
The latest race content, interviews, features, reviews and expert buying guides, direct to your inbox!
As well as Wiggle and Chain Reaction Cycles, SSU owns other cycling brands such as Probikeshop, Vitus and Nukeproof. The company’s portfolio also covers tennis, outdoor and team sports retailers.
In August this year, Cycling Weekly reported that Wiggle Chain Reaction Cycles recorded a pre-tax loss of over £97million in the year to 30 September 2022.
Within the retailer's accounts, chief financial officer Adrian Bruce cited Brexit and the post-pandemic cycling slump as factors that hit the business.
Bruce said: “The effects of the current economic uncertainty have been felt throughout the retail industry in the recent months and the future impact of these uncertainties remains difficult to predict.”
Wiggle Chain Reaction Cycles was acquired by SSU in December 2021 in a deal that saw the latter settle £312.9million of the retailer’s external shareholder debt and bank debt.
It is not known at this stage which brands SSU might seek to purge in its restructuring.
Thank you for reading 20 articles this month* Join now for unlimited access
Enjoy your first month for just £1 / $1 / €1
*Read 5 free articles per month without a subscription
Join now for unlimited access
Try first month for just £1 / $1 / €1
Tom joined Cycling Weekly as a news and features writer in the summer of 2022, having previously contributed as a freelancer. He is the host of The TT Podcast, which covers both the men's and women's pelotons and has featured a number of prominent British riders.
An enthusiastic cyclist himself, Tom likes it most when the road goes uphill and actively seeks out double-figure gradients on his rides.
He's also fluent in French and Spanish and holds a master's degree in International Journalism.
-
Tweets of the week: Pogačar can be beaten, Pidcock meets the royals, and Remco's an Arsenal fan
Sadly for Tadej Pogačar, serial winning doesn't seem to apply to go karting
By Tom Davidson Published
-
Friday roundup: Rapha does sportswear, Oakley meets PNS and Restrap makes a vest
Two new clothing lines, some hi-tech smart glasses and a hydration vest to inspire you to ride further
By Luke Friend Published
-
Introducing the start-up that helps cyclists find local mechanics and get a 'better service'
'We want to support the majority of the smaller, independent chains that are out there,' says Bikebook founder
By Tom Davidson Published
-
Major bike retailer posts profits despite 'downward trend' in cycling industry
Tredz records £1.4m profit after parent company Halfords issues warning
By Tom Davidson Published
-
Wiggle and Chain Reaction Cycles sites back online after Frasers Group takeover
The two brands have relaunched after a week off, with slightly different branding
By Adam Becket Published
-
Wiggle and Chain Reaction websites to be relaunched by Mike Ashley's Frasers Group
"Relaunch" set to take place next week, after Frasers Group acquired the brands
By Adam Becket Published
-
Is this the end for Wiggle and Chain Reaction after 'holding page' displayed on website?
Holding pages present on both websites, with remaining orders set to be fulfilled in 7-10 days
By Adam Becket Published
-
Is it safe to buy from Wiggle as liquidation nears?
Consumer law expert recommends only buying products from retailer that you’ve used before and were satisfied with as liquidators officially appointed by parent company
By Tom Thewlis Published
-
What the story of Evans Cycles can tell us about the future of Wiggle
After being bought by Frasers Group, are the woes of Wiggle Chain Reaction Cycles over?
By Tom Davidson Published
-
Would a Mike Ashley takeover of Wiggle be a ‘concern to the cycle industry’ or a ‘careful bit of business’? - Insiders weigh in as redundancies lead to trade brain drain
Struggling retailer has now axed nearly every member of staff after going into administration last year
By Tom Thewlis Published