World News Round-up
The End of WiggleCRC in Australia?
A recent article in Bike Europe implied that WiggleCRC’s days in Australia could be over for ever.
At their peak about from about 15 years ago to a decade ago UK based Wiggle and Northern Ireland based Chain Reaction Cycles were both widely disliked names amongst Australian bicycle retailers. One particular bone of contention was that they could avoid import duties that regular bicycle industry importers into Australia had to pay, provided individual shipments to Wiggle’s customers were under a relatively high exemption threshold.
From memory the original threshold was A$1,000. Wiggle’s original founders sold their company, which later took over CRC to become WiggleCRC. It went through a number of management and ownership changes, but seemed to steadily lose market share here.
Below are excerpts from an article first published here in Bike Europe:
PORTSMOUTH, UK – Recent developments at WiggleCRC have taken a dramatic course as the company announced it will close down all its international activities. Once at the forefront as ‘the’ example of how to operate a global webshop, the company has lost its momentum on the overseas markets.
The take-over by e-commerce giant Signa Sports United in 2021 turned out to be an unhappy marriage for WiggleCRC. “The acquisition enhances our global online leadership especially in the bike category,” said Stephan Zoll, CEO of SSU in 2021. It turned out for the worse. The Signa Sports empire collapsed over real estate investments and in the statement about the reorganization WiggleCRC writes that the UK domestic market currently accounts for 85% of the group’s revenues.
The financial struggle at Signa Sports already resulted in WiggleCRC’s insolvency in October. Although several names were mentioned as potential investors, it turned out to be difficult to find a new owner on the short term.
The joint administrators of WiggleCRC are now directing a shift in the group’s business model which will see it focus its efforts solely on the UK market. According to a company statement to road.cc “the announcement comes as a process to sell the business gathers pace amidst ongoing talks with multiple parties. The international Wiggle and Chain Reaction web shops will therefore be closed over the coming weeks.”
Scott Sports Receives Quarter Billion Dollar Lifeline
Scott Sports is the owner of Scott bicycles which is the flagship global brand that’s exclusively distributed in Australia by Sheppard Cycles.
Both Scott Sports and Sheppard Cycles are majority owned by the South Korean multibillion dollar sporting goods company Youngone.
According to a recent article in the USA bicycle trade magazine Bicycle Retailer and Industry News (BRAIN), Youngone Corp., which acquired a majority share in Scott Sports in 2015, has loaned its subsidiary Scott Sports 150 million Swiss francs (A$264 million).
In a filing with South Korean financial regulators, Youngone said it made the investment in the form of a 4.6% loan at the end of 2023. “SCOTT SPORTS SA plans to use this money loan for the company’s working capital, etc., and will appoint a person designated by the company as the Financial Controller to manage and supervise the process,” the filing said.
The filing also disclosed that Scott Sports made a profit of US$35.8 million (A$54.4 million) in 2022 on sales of US$628 million (A$954 million) and profit of US$23.2 million (A$35.2 million) in 2021 on sales of US$695 million (A$1.05 billion).
The loan will mature on 27th December 2024, with 100 million Swiss francs (A$176 million) due on 2nd Jan 2025. The loan is scheduled to be made in instalments throughout this year according to the filing.
Youngone acquired a 20% share in Scott in 2013 and expanded it to 50.01% in 2015, taking over the majority position from Beat Zaugg, who is Scott Sports SA’s CEO.