BikeBiz Bicycle and cycling retail news
Wiggle is on the verge of absorbing its main retail rival Chain Reaction Cycles. The sale will go through next week, industry insiders told BikeBiz.
Founded in 1999 as an offshoot from Butlers Cycles, a Portsmouth bike shop, Wiggle grew and grew, and in 2011 was sold to Bridgepoint Capital for £180m.
Chain Reaction Cycles sprang from a small bike shop in the tiny town of Ballyclare in 1989. The shop is now a barber’s shop, a very small barber’s shop. This was the second shop. The first, started in 1984, was Ballynure Cycles, an even smaller operation. The business was founded by George and Janice Watson – their first sale was a chain link costing 11p. When the business moved to Ballyclare the decision was made to change the firm’s name, and Chain Reaction Cycles was born. The website was launched the following year.
A third of CRC’s sales come from outside the EU, as dealers in Australia and America know only too well. In 2014, the company – which employs more than 600 people – reported profits of £3.77m from sales of £153.4m.
Bridgepoint reports that Wiggle employs 444 people, and had sales of £182m in 2014, with half of those sales delivered internationally.
Wiggle and Chain Reaction have been fighting head to head for many years, with Wiggle moving ahead of Chain Reaction in 2013 when sales at the family-owned firm dropped six percent to £145m. Chris Watson, son of George and Janice, is the company’s managing director. The Watson family is said to have a personal fortune of £200m.
Nobody at Wiggle or Chain Reaction would confirm sale negotiations are taking place.
Bridgepoint Capital – which would be stumping up the money for any purchase – says on its website that it "seeks to acquire companies with strong market positions and earnings growth potential where significant additional value can be created through expansion and operational improvement."
The private equity firm said Wiggle "benefits from the ongoing migration to online sales and now has over 1.3 million ‘live’ customers in over 90 countries."
It adds that Wiggle is an "international market leader … growing fast at the expense of ‘bricks and mortar’ independent competitors."
