Mike Ashley’s Frasers Group reportedly buys Wiggle Chain Reaction Cycles for less than £10 million

Mike Ashley’s Frasers Group has acquired Wiggle Chain Reaction Cycles’ brand and intellectual property in a deal believed to be worth less than £10 million, according to reports.

The deal for the online cycling retailer, first reported by road.cc last week, will see Frasers Group – now run by former Newcastle United owner Ashley’s son-in-law Michael Murray – add WiggleCRC to its existing cycling business, which includes Evans Cycles and ProBikeKit, according to the Times.

As also reported in February, the deal will result in all 447 of WiggleCRC’s employees losing their jobs, with a number taking to social media last week to confirm that their “time was up” at the company as the administrators “closed the shutters”.

> Mike Ashley set to take over Wiggle Chain Reaction as administrators “close the shutters” amid mass redundancies, sources suggest

It is believed that the purchase also includes Wiggle’s in-house brands, such as its Vitus and NukeProof bike ranges, dhb clothing, and Lifeline accessories.

According to the Times, Frasers was attracted to Wiggle’s strong social media and online presence, and believes the brand will aid the retail giant’s attempts to move its sports business, at the centre of which sits ubiquitous retailer Sports Direct, upmarket.

The deal also follows the trend for Frasers to purchase the brand and intellectual property of retailers on the brink of collapse at a heavy discount, while laying off all or almost all of the company’s staff in the process.

Last May, the retail empire bought the stock and intellectual property assets of online retailer ProBikeKit (PBK), which had previously shut down its lifestyle division citing “lossmaking”.

The acquisition of PBK was also handled through Frasers’ Evans Cycles subsidiary, which itself was bought by retail entrepreneur Ashley in 2018 for £8 million in a similar move that saw over 300 staff members made redundant and the rest added to zero-hour contracts.

> WiggleCRC owed Haribo £20,000, plus millions of pounds to other cycling brands, administrator's proposal document reveals

Frasers’ purchase comes just four months after WiggleCRC entered administration and was put up for sale in the wake of the financial crisis that engulfed its Berlin-based parent company Signa Sports United (SSU), resulting in 105 jobs being cut at Wiggle, fellow online retailer Chain Reaction, and distributor Hotlines, and the company owing almost £27 million in debts to 400 creditors.

After recording a pre-tax loss of over £97 million in 2022, alarm bells began to ring concerning the future of Wiggle Chain Reaction last autumn, after parent company SSU reported “severe liquidity and profitability challenges” and delisted its shares.

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As a result, SSU’s €150 million funding commitment from its own parent company, Signa Holding, was withdrawn, ushering in an increasingly gloomy outlook for Wiggle and the group’s other cycling businesses, which included Bikester, Probikeshop, and Farrhad.de.

Soon after, as SSU filed for insolvency, Wiggle’s seemingly inevitable plunge into administration was confirmed, as its joint administrators put the company up for sale and initiated a swathe of job cuts at the start of November.

Administrators reported “considerable interest” for the business from potential buyers, among them Ashley’s Frasers Group, and in December said they remained “optimistic” over the possibility of a sale amid “considerable trading profit”.