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Signa Sports United (SSU), the owner of Wiggle/Chain Reaction Cycles (CRC) and bike brands Nukeproof and Vitus, has announced a restructure, including the termination or winding down of non-performing assets.
The decision has been taken in light of continuing macroeconomic headwinds, oversupply in the market and the company’s “severe” liquidity and profitability challenges.
SSU’s directors have also confirmed that the company will be delisted from the New York Stock Exchange (NYSE) where its share price has dropped significantly.
In December 2021, the price peaked at $9.21 but at the start of September this year, it had fallen to $0.89.
As well as its operations in the cycling industry, SSU also trades in tennis, outdoor, and team sports across more than 80 online sites.
Although the company did not say which of its business units would be directly impacted, it said its bike business, specifically, has lagged management expectations.
According to an update published earlier this month: “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.”
To support this, SSU’s board of directors will extend the scope of the duties of Torsten Waack van Wasen, CEO of internet stores since February 2023, to become part of the company’s management team as chief performance officer (CPO) for the Group.
Waack van Wasen has restructuring experience from his prior positions, including at Alvarez & Marsal and Alteri Investors.
In Q1 2024, Waack van Wasen will become the company’s CEO, following the expiry of the Stephen Zoll’s contract.
Read more: Wahoo to close RGT virtual cycling app at the end of October
Earlier this year, Wiggle/CRC posted a pre-tax loss of almost £100 million in its latest company accounts.
The UK group, Mapil Topco Limited, recorded pre-tax losses of £97,041,000 in the year to September 30, 2022.
This was a significant increase from the previous year, when it lost £14,555,000.
The directors cited “challenging” economic conditions as the key contributor for this, including the impacts of Brexit and the post-pandemic drop in demand for cycling products.
