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news
Wiggle down Wiggle Chain Reaction ditches international websites to focus on UK citing "rising international air freight costs and Brexit"
The administrators of Wiggle Chain Reaction Cycles (Wiggle CRC) have said that they will close down the international websites of both online retailers to focus exclusively on the UK market, adding that the businesses, which entered administration in October, are proving “incredibly attractive” to potential buyers.
Joint administrators were appointed to the business in October, shortly after parent company, Berlin-based Signa Sports United, delisted its shares from the New York Stock Exchange after its owner, Signa Holding, failed to provide €150 million of previously committed funding.
In an update, a copy of which was provided to road.cc, joint administrators Alastair Massey and Tony Wright from the advisory firm FRP revealed that the UK accounts for 85 per cent of revenues and that they are “directing a shift in the group’s business model which will see it focus its efforts solely on the UK market.”
The international websites, which serve customers around the world including within a number of EU countries, Australia and Japan, will be closed “over the coming weeks,” according to the administrators, who said that “this part of the business has been impacted by a range of economic factors including rising international air freight costs and Brexit.”
In its most recently published report and accounts which cover the year to 30 September 2022, Wiggle said that international sales had “declined by 26 per cent driven mainly by the full year impact of Brexit reducing sales into [the] EU where higher duty and fulfilment costs has necessitated higher pricing.”
The administrators added that “the business is committed to honouring all outstanding sales, returns and warranty obligations for international customers through the usual processes.”
> Frasers Group reportedly mulling bid for Wiggle after online retailer enters administration
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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12 comments
So, 85% of it's revenue was from UK sales, leaving only 15% for EU/Global - it's not a huge amount, yes it will have an impact, but not the sort of impact (unless they were making huge margins on exported items) that you'd expect a competently run business to go bust over.
And, as predicted earlier... 🤣🤣🤣
You said use Brexit as an excuse. I have not said Brexit was not an issue have I?
I've stated that a competently run company shouldn't really go bust from losing 15% of it's revenue. Looks to be bad management/decreased margins & a downturn generally in cycling, not Brexit that's necessarily the issue.
Please try and be accurate in the future.
To be accurate, they haven't lost 15% of revenue, that's what the current ROW sales are. As stated in the article
"Wiggle said that international sales had “declined by 26 per cent driven mainly by the full year impact of Brexit reducing sales into [the] EU where higher duty and fulfilment costs has necessitated higher pricing.”
No surprise really, you put up barriers to market and competitors who don't have those barriers are now more competitive than you are.
Yes you're correct, but I really mean that losing that 15% should not be a killer blow to a business the size of Wiggle, especially if the margins on that 15% are tight anyway, as I guess they are.
If the sales are 15%, (presumably a bit higher before) have declined 26% then that's even less of a downturn than I'd thought - as now we're only talking of a 26% reduction of 15% revenue.
I don't believe they are suggesting it's a killer blow but merely the reasoning behind shutting the International sites at this time. Pre-Brexit sales into the EU could be seen as sales into your home market rather than an International sale as such.
Yes agreed - I was referring more overall to Wiggles apparent financial struggles as a whole as well. As someone else has commented, it looks like there's more to what meets the eye.
sure but if they have only lost 26% of international sales (which are currently 15% of the total) then that loss only accounts for 4% of total sales, so there must also be a significant loss in the UK market.
I fancied a wheelset at 50% off, but when they realised I was in Spain the discount was only 18% and so no longer attractive or even competetive. Thanks Brexit.
Ah, more of the delightful gifts of Brexshit. Glad I sneaked an order in yesterday! I was keen to get spares for my Vitus Venon Evo in case Wiggle take Vitus with them if they go down the pan, leaving me without access to spares! The app seems still to be working for us ex-pats though.
One of the biggest threats to cycle retailers is the amount of cyclists who now use apps like zwift. The days of buying winter clothing and items for bikes has decreased with so many like me now opting to ride indoors when the weather is crap. Go on zwift there is thousands riding at any time of the day
I'm sure the usual suspects will be along shortly to say that Wiggle is simply using Brexshit as an excuse for their own failings and that Brexshit is actually a huge success. 🙄