Leading online bike retailer Wiggle CRC, which includes the Wiggle and Chain Reaction retail brands, is reportedly entering a self-administration phase.
The UK-based online retailer is currently continuing to trade and is aiming to restructure itself amidst a number of challenges faced by its owner, Germany-based online retail specialist SIGNA Sports United.
Citing ‘subdued demand’ from consumers and overstocking, Wiggle CRC owner SIGNA Sports United (SSU) has reported severe liquidity and profitability challenges for a number of weeks.
In recent days, SIGNA Sports United (SSU) has confirmed that Tennis-Point, one of its major subsidiaries, has filed for insolvency. Other legal entities of the SIGNA Sports Group, including SIGNA Sports United NV, which is the ultimate parent company of the SIGNA Sports United Group, are in the course of initiating insolvency proceedings in the coming days.
Headquartered in Berlin, SSU has businesses operating within the bike, tennis, and outdoor categories. SSU has more than 80 online sites and partners with 500 shops serving over 6 million customers worldwide.
With SSU sitting on excess stock there has been an adverse effect on the company’s margins and increasing negative cash flows. The New York Stock Exchange (NYSE) commenced the process of delisting SIGNA Sports United from the NYSE on October 11, 2023. Trading in the company’s shares was suspended immediately.
Citing demand for the company’s products remaining significantly below 2022 and also pre-pandemic levels, in early October, SSU started a ‘strategic realignment and restructuring program’…
‘The key performance enhancement measures under consideration include the streamlining and rightsizing of under-performing business units, the termination or winding down of non-performing assets as well as the opportunistic evaluation of disposals of non-core assets to strengthen the company‘s distressed liquidity position and financial profile.’
In addition to facing a number of external headwinds and waning consumer confidence, SIGNA Sports United has also experienced inter-group funding issues. In mid-October, René Benko, the founder of SIGNA Group and Chairman of SIGNA Holding, confirmed that SIGNA Holding had pulled €150 million of equity funding for SIGNA Sports United.
This led to reports that SIGNA Sports would take legal action against the termination of the equity commitment by SIGNA Holding. While threats of litigation rumble, however, it is clear that SIGNA Sports United is facing insolvency across many of its entities, and its future is increasingly uncertain.
SSU companies and brands include Tennis-Point, WiggleCRC, Fahrrad.de, Bikester, Probikeshop, Campz, Addnature and TennisPro.
