The next step in the administration of WiggleCRC appears to be unfolding, with The Times reporting on Sunday that Frasers Group has agreed on a deal to purchase the brands and intellectual property of the group.
Frasers Group has long been rumoured as a potential suitor for the Wiggle business – which was part of Signa Sports United NV – once the UK-based company went into administration in October after recording a FY23 loss of £74.9 million on sales of £204.2 million.
The report in The Times said the value of the sale was less than £10 million and that part of the appeal for Frasers Group was the strong online and social media presence of the Wiggle and Chain Reaction Cycles brands.
The UK-based retailer, Frasers Group, which is owned by notorious British businessman Mike Ashley, includes Sports Direct, Evans Cycles and Pro Bike Kit, and has made no secrets of its plans to grow its sports retail business in the Europe, Middle East and Africa region (EMEA).
"We have a clear ambition to be the leading sports retailer in EMEA and we are making progress on broadening our footprint through a focused international M&A strategy," company chief executive Michael Murray said in a December release on Frasers Group's half-year results.
The group, which acquired storied British bike retail chain Evans Cycles in 2018, had also reached an agreement to buy German sports retailer SportScheck last year but said at the end of November that it had exercised its right under the agreement to withdraw from the deal after the brand – also part of the troubled Signa Sports United NV group – filed for insolvency. However, at the time Frasers Group said it planned to work with the appointed administrators with a view to still acquiring the business and assets.
The latest development for WiggleCRC comes after it was revealed last month the business, under the administration of FRP Advisory's Anthony Wright and Alastair Massey, was set to lay off its entire workforce as the final act before sale, as it was understood that the new owner did not want to take on the staff from the existing business. It has since been reported that a total of 447 employees will lose their jobs.
An anonymous source said that "once the warehouse is clear, it’s game over. Wiggle and CRC will cease. The brands have been bought, but IP only – no staff or stock."
That also included WiggleCRC's owned brands, which include Vitus and Nukeproof bikes, alongside clothing and component brands such as dhb, Prime and Lifeline. Administrators had already switched off the international eCommerce stores for Wiggle and Chain Reaction Cycles last year and delivered some redundancies, but had kept the UK operations running while it sought to sell the business.
According to the administrators' February statement of affairs, the company's debt to suppliers sits at more than £26 million, with customer vouchers of nearly £382,956 also outstanding. The statement puts the tally of total assets available to unsecured creditors at less than £10 million, and the 'estimated deficiency' – which includes a total of around £100 million in the items outlined as inter-company payables and guarantor on Signa Sports United bank debt – at more than £142 million.
The decision to place Wiggle into administration was made after Signa Sports United unexpectedly announced that its own parent company, Signa Holding, had terminated an unconditional €150 million funding commitment. The turmoil within the business is widespread with numerous businesses in the group heading into administration. Signa Holding has also declared insolvency, with creditor claims of close to €9 billion according to a report on Reuters.
