Wiggle Chain Reaction Cycles records £97m loss as Brexit and pandemic fallout hits
The Wiggle - Chain Reaction Cycles group is the latest to report economic struggles
![Wiggle hero](https://cdn.mos.cms.futurecdn.net/EKMRu2QKcNvMqW99rMoNe8-415-80.jpg)
Online cycling retailer Wiggle Chain Reaction Cycles (CRC) has posted a pre-tax loss of almost £100million in its latest company accounts, citing Brexit and the post-pandemic cycling slump as factors that hit the business.
The UK group, which is held under the name Mapil Topco Limited and covers both Wiggle and Chain Reaction Cycles web stores, recorded a loss before tax of £97,041,000 in the year to 30 September 2022. This was a significant increase from the previous year, when it lost £14,555,000.
In documents filed last month, the directors presented their report on the company’s finances, in which they noted a “challenging” economic situation in the UK.
“The Group is suffering from the aftereffects of the Covid pandemic,” Wiggle chief finance officer Adrian Bruce wrote, highlighting that the lockdowns initially led to a “pull forward of revenue”.
“UK sales have benefited from pandemic lockdowns, particularly through 2020 and 2021, and UK sales in the year to September 2022 are down by 32% due to the reduction in this benefit, although they are 7% higher than the year to September 2019 [before the pandemic],” wrote Bruce, who left the company in May this year, after the accounts were filed.
With regards to international sales, 38% of the company’s £252million annual revenue came from outside the UK. The directors, however, pointed to a fall in sales caused by Britain's exit from the EU, which became effective in January 2020.
“International sales declined by 26%,” Bruce wrote, “Driven mainly by the full year impact of Brexit reducing sales into EU, where higher duty and fulfilment costs has necessitated higher pricing.”
Get The Leadout Newsletter
The latest race content, interviews, features, reviews and expert buying guides, direct to your inbox!
In December 2021, the WiggleCRC group was acquired by global sports retailer Signa Sports United, in a deal that brought “significant one-off legal and professional and staffing costs”. These adversely affected the company’s profits, with costs incurred arriving at just over £36million.
Further costs came in rebranding the Wiggle website, which was updated to a green colour scheme in April this year. According to the company accounts, the business made £14.5million in capital additions during the 2022 year, which were “mainly” investments in improving the online shop and back office systems.
Reflecting more generally on the business, the directors wrote: “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.”
As part of the acquisition, however, Signa Sports United settled the company’s external shareholder debt and bank debt, which amounted to a total of £312.9million. The company had since drawn down €60million (£51million) of shareholder funds.
Elsewhere across the industry, Ribble Cycles reported a £5million loss for the 2022 financial year, also citing Covid and Brexit issues, but noted that 2023 has proven more stable.
Last month, UK-based cycling distributor FLi Distribution collapsed, with the owner blaming people who voted to leave the EU. This came after British children’s bike manufacturer Frog Bikes said mounting Brexit costs drove it into the red.
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.
-
Unbound Gravel lottery opens two months early, ensuring riders are 'more prepared than ever'
Registration for the 2025 Unbound Gravel will open on Friday, November 1, 2024, and close two weeks later, on November 15. Lottery winners will be announced on November 21, 2024.
By Anne-Marije Rook Published
-
Star triathlete Taylor Knibb to take on world's fastest cyclists in the Olympic time trial
Colorado-based 26-year-old Taylor Knibb will be representing Team USA in both the individual time trial and triathlon at the Paris Olympics.
By Kristin Jenny Published
-
Wiggle sale revealed to be £3m to second-best Frasers Group
Business tycoon Mike Ashley scooped up intellectual property after initial deal fell through
By Tom Davidson Published
-
Cycling industry still 'appealing' to investors, despite turbulent post-Covid period
Brands suffered losses, bike shops closed and other areas of sector hit after pandemic, but industry should still be attractive
By Tom Thewlis 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