ChainReactionCycles to be sold amid extreme financial challenges

ChainReactionCycles was grown from modest roots – as a small bike shop – in Northern Ireland to become a huge player in cycling eretailing but is now set to be sold as the company that owns it has been hit by extreme financial challenges. It was bought, and merged with, then rival operator, Wiggle, in 2016, forming WiggleCRC.

That merged entity was bought by Signa Sports United in 2021, and includes brands like Vitus, and Nukeproof. But WiggleCRC reported a £97 million loss earlier this year. ChainReactionCycles was also the former sponsor of the Sean Kelly UCI Continental team, which was also sponsored by An Post and rode Vitus bikes.

While the Wiggle.com, ChainReactionCycles.com and Hotlines-UK.com sites – the latter a business to business enterprise – have continued to run, the group they are all part of is now in peril amid very significant trading challenges.

Chain Reaction Cycles began as a bike shop in 1984 in Ballynure, Co Antrim. It initially offered goods for sale via catalogues and adverts. It started a website in 1999 to expand and streamline that part of its business, which grew into a massive ecommerce entity, before being bought by Wiggle and the merged entity being acquired by Signa Sports United.

Earlier this month is became clear that Signa Sports United (SSU) was in financial trouble, and it cited its cycling businesses as a specific problem, saying they were performing far behind expectations, after the boom pandemic period. It announced a “restructuring” programme and mooted “the termination or winding down” of those assets that were not performing amid serious “liquidity and profitability” problems.

Signa Holding, one of SSU’s key shareholders, committed €150 million to SSU to ensure it continued as a going concern. However, after just €6 million of that money had been drawn down, the commitment for further funds was reneged on, effectively removing the safety net.

WiggleCRC then cancelled all existing purchase orders with suppliers and stopped paying invoices. Last week, SSU’s Europe-based ecommerce umbrella company, Internetstores, filed for insolvency in Germany. It has since emerged the WiggleCRC brand is set to be put up for sale.

“WiggleCRC, the online sports retail group, is set to be put up for sale following the appointment of Joint Administrators,” said a statement from joint administrators Anthony John Wright and Alastair Rex Massey from FRP Advisory, who were appointed on Wednesday.

“A group of subsidiary companies that form the remainder of WiggleCRC including Chain Reaction Cycles Limited, Chain Reaction Cycles Retail Limited and Hotlines Europe Limited are expected to be placed into administration imminently.”