Chain Reaction has finally run out of Wiggle room, but will we learn any lessons from the death of the 'world's biggest bike shop'?

The exact position of the sale/purchase of Chain Reaction Cycles and Wiggle is still lost in the dust of their slow collapse over the past few months. The current best guess / least denied rumor is that the bike industry’s favorite pantomime villain – Mike Ashley of Sports Direct/Evans Cycles fame – has bought the IP to the house brands. In this case, as there are unlikely to be any patents involved, this Intellectual property is mainly the right to use the trademarks and names for the CRCWiggle house brands. These include Nukeproof, Vitus, Ragley, DHB and Brand-X. Product lines that have grown to become very well-regarded and well-known players in the value market. Nukeproof has also been a top-level racing brand with top World Cup DH results right up to the end of last season. What Ashley will do with these brands (if it is him who’s bought them) is totally unknown though.

What became clear a few days ago, however, is that it won’t be continuing to run them as before. Pretty much everyone – from legendary racers like Sam Hill to warehouse, marketing and clerical staff – involved in those brands, distributor Hotlines and the overall CRCWiggle business lost their jobs last week. While there’s no official statement relating to any of this, the buzz on LinkedIn and other social media is that the skeleton crew remaining are purely in place for short-term, shift everything and shut down purposes. "UP TO 80% OFF: THE FINAL SALE" emails arriving in inboxes support that sad conclusion too.

The real victims of vulture capitalism

But what are the wider implications of these two huge Siamese twins of discount pricing completely collapsing? What lessons – if any - will the industry and consumers learn from it? And if you’re a hyena with your head in the carcass what are the best bits to feast on and which might be toxic?

First off, best of luck to everyone who lost their jobs. Some of them were mates who are now pitched into an already very high-pressure job market as the industry continues to struggle post Covid. They were clearly a really strong, passionate crew who did some brilliant things whether that was delivering excellent product to market, creating excellent content or putting people on podiums. There’s a whole world of other freelancers and contractors who’ve lost a lot of work too so it sucks for them as well. Ditto the suppliers, whether that’s component vendors whose gear was used on Vitus or Nukeproof bikes or the people who supplied the cardboard boxes. Somebody at Haribo has probably been left with a bitter pill to swallow rather than a rubbery fried egg too – if Wiggle hadn’t paid their outstanding £20,000 debt for the packets of sweets they threw into every order.

However, a lot of bike shops and probably bike brands and distributors will be glad to see the back of companies that have made their lives much harder – and put many similar businesses under – over the past couple of decades. That was a global issue too as CRCWiggle managed to avoid a lot of price stability measures by importing from abroad.

Unfortunately for the celebrants, while the beast might be dead, it’ll still take a long time for the carcass to vanish entirely. Just like any other kill, the best meat went first. That was the desirable product that people were happy to grab as soon as discounts dropped to 25 percent. Now we’re at the ‘it’s tempting but I’m not sure’ 50 – 80 percent off level where sizing ranges might not be complete and they’re more of a ‘want’ not a ‘need' purchase. Warranty support on house brands like Vitus and Nukeproof is presumably down the can now too. I can still see people being blinded by the bargains and taking the risk though and given how bad the warranty departments of even some live brands are, I don’t really blame them.

The slow decay of this massive carcass is stinking up the whole selling environment too. Remember, we’re already looking at a situation of massive overstock caused by Covid greed plus all those suddenly canceled Chain ReactionWiggle orders. Shops, distributors and brands are all simultaneously trying to shift a vast amount of their own excess at massive discounts in the hope of staying afloat long enough to launch fresh, more profitable lines. However, they’re now competing with a product source that doesn’t even have to stay alive, it just needs to leave as small a stain as possible to clear up once it’s gone. 

Feeding the beast

Then again, these were the companies that filled the vast automated warehouses of Wiggle and CRC with container loads of product that looked great on the turnover line of their accounts, even if the numbers on the profit column looked a lot less impressive.

An ex-Mavic contact reminded me that while it was alive, CRCWiggle created a lot of its headline discounting by hoovering up unwanted stock that suppliers were grateful to get rid of. End of line odd sizes, failed or obsolete products. Wiggle or CRC would take them off your hands and out of the box marked headache for a minimal cost. But at least it was better than having to pay to get rid of them or keep them in storage indefinitely. I know from my time working for distributors that they weren’t / aren’t the only industry pig farms that will gobble up whatever swill you serve them with noisy delight only for it to appear as water-plumped bargain bacon shortly after. You can even list Mike Ashley as someone who fulfills this place in the broader retail landscape, but again, that’s no bad thing. Because if it wasn’t for Sports Direct and Evans Cycles, our town and city centers would be even more dead and empty due to online shopping operations just like Chain Reaction and Wiggle.

And before people start saying that we should all support our local shops rather than buy online, I know loads of shops who used CRC and Wiggle as primary suppliers for many products because their delivery times and prices were actually better than the official distributors. 

In other words, whether you’re a distributor or shop moaning about the damage CRCWiggle did, don’t complain about the pig sh*t if you were the one who fed it.

Are there any lessons to learn?

Finally, if you might think that the death of CRCWiggle might be seen as a lesson that minimal margin, price-slashing tactics don’t work, I wouldn’t hold your breath. Not least because it was actually a going concern until the investors in parent company Signa Sports unexpectedly pulled their support. And while I’m surprised no one stepped in to buy them as a functioning concern, I don’t think we’re done with vulture capitalists sticking their beaks into our business.

History tells us someone will always try and make a quick buck from others wanting to get more for less and the biking world is no different. And frankly, with everything else costing far more, pay meters in more and more forest car parks, and wages freezing to match this miserable endless winter, why shouldn’t you get a bargain to cheer yourself up?