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iceman2058
2/10/2016 5:35am
2/10/2016 5:35am
Edited Date/Time
2/12/2016 2:08pm
UPDATE: A couple of days after the first reports surfaced, today we can confirm: Online retailer Wiggle is set to purchase competitor Chain Reaction Cycles, and the deal has now been signed. The two companies together are worth more than £300m. We still do not know if the two brands will continue operating independently under joint ownership, or if they will merge to become one commercial entity as well.
The deal is subject to merger control clearance from the Competition and Markets Authority.
Chain Reaction Cycles managing director Chris Watson said: "This is an exciting new chapter for the Chain Reaction Cycles brand. Since the business started in 1984, we’ve grown strongly from our mountain bike origins in Northern Ireland to meet the needs of more MTB, BMX and road cyclists across more countries."
He added: "Coming together with Wiggle is a great way to continue that growth, as a global force in cycling and a leader in technology, ecommerce and, of course, innovation.”
Wiggle CEO Stefan Barden, who will lead the combined company, said: "In the global online retailing marketplace in which we operate, there is a compelling industrial logic for our two businesses to come together to become a stronger force."
He added: "We have long respected Chain Reaction Cycles as a business and share its values and commitment to delivering the best possible price and first class service for its customers. Like us they have a deep seated love of cycling."
Wiggle was founded in 1999 as an offshoot from Butlers Cycles, a Portsmouth bike shop and was sold to Bridgepoint Capital for £180m in 2011.
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 had 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.
Original Feb 10 story from BikeBiz:
BikeBiz believes Wiggle is on the verge of absorbing its main retail rival Chain Reaction Cycles. It's said to be highly likely that the sale will go through next week, multiple sources say.
Founded in 2009 as an offshoot from a Portsmouth bike shop, Wiggle grew and grew, and was sold to Bridgeport Capital for £180m in 2011.
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, in 1998, 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.
Almost 40 percent of CRC’s sales come from outside the EU, as dealers in Australia and America know only too well.
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. The Watson family is said to have a personal fortune of £200m.
German bike brand Cube has very recently moved to Wiggle after formerly being distributed by Chain Reaction.
Nobody at Wiggle or Chain Reaction will confirm a sale is on the cards.
But hey.
I guess we'll find out next week.
They even have a better looking website than CRC.
Original BikeBiz article:
The merger of Wiggle and Chain Reaction Cycles is expected to complete shortly, following clearance from the Competition and Markets Authority.
Wiggle and Chain Reaction Cycles will create an even more compelling customer proposition, retaining the brands and websites of each business, whilst seeking to extend product range, over a stronger, well-invested platform and infrastructure. Together the combined business, which will have revenues in excess of £300m will be better placed to compete in the growing global online market for cycling, running, swimming and tri-sports products and accessories.
The corporate name of the newly formed group company will be called WiggleCRC and will be chaired by Brian McBride and managed by Stefan Barden, as Chief Executive Officer. Chris Watson, currently Managing Director of Chain Reaction Cycles, will sit on the board and will be a significant shareholder.
Stefan Barden, Chief Executive Officer of Wiggle and Chris Watson, Managing Director of Chain Reaction Cycles, said:
“Together, Wiggle and Chain Reaction Cycles’ first class team of sports enthusiasts and strong heritage and expertise in cycling, running, swimming and tri-sports, will form the foundations for building a global champion.”
The online bike retailer, WiggleCRC, is planning to cut about 300 jobs in Northern Ireland.
The company was formed when Wiggle took over Doagh-based Chain Reaction Cycles earlier this year.
The company says it intends to concentrate the majority of its warehouse facilities in Wolverhampton in England.
Some 152 staff and 161 agency roles are under threat in Northern Ireland as a result.
In a statement the company said: "For WiggleCRC to retain its position and remain competitive in the UK as well as increasingly global markets, we have concluded that this can be best achieved by concentrating the majority of our distribution through our warehouse facility in Wolverhampton.
"This necessary step, will require the relocation of significant warehouse activities currently in Doagh, Carrickfergus and Ballyclare.
"WiggleCRC will retain a significant staff and management presence in Northern Ireland, with at least 275 unaffected employees forming a vital part of our ambitious growth plans."
John Campbell, BBC News Northern Ireland Economics and Business Editor
Chain Reaction has been our biggest retail success story of the internet era.
The company is one of the world's main online sellers of bikes and cycling accessories.
WiggleCRC is planning to cut about 300 jobs in Northern Ireland.
It started in 1985 as a single bike shop in Doagh, owned by the Watson family.
But having built a world-class operation, employing more than 500 people, they sold it last year to rival firm, Wiggle.
Now Wiggle are planning a shake-up which will mean concentrating warehouse operations at its massive facility in Wolverhampton.
The company says it will keep at least 275 jobs in Northern Ireland in roles like management, IT and sales and has promised employees will be treated fairly and in line with their values.
Its wheel building operation will remain in Ballyclare.
Major job losses at such a successful and respected company will shock many people.
But in a very competitive market the new owners were never going to sentimental about Northern Ireland jobs.
Considering that at the moment stuff takes longer to arrive to Ireland when it's ordered from England than it does from France or Germany, I can see my order frequency with CRC dropping significantly. Not that they care as the ROI market is probably not a big part of their income.
Shame really.
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