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Mike Ashley’s Frasers Group has acquired the online bicycle retailer Wiggle out of administration, seizing an opportunity amidst the industry’s turmoil.
Frasers, which owns Sports Direct, has finalised a deal to purchase the brand and intellectual property of both Wiggle and Chain Reaction Cycles, another online bike store.
Wiggle’s addition will complement Frasers’ existing cycling business, which includes Evans Cycles.
Under the leadership of chief executive Michael Murray, Ashley’s son-in-law, Frasers reportedly acquired the Wiggle brand and intellectual property for less than £10 million.
The acquisition comes at a time when the cycling industry is facing significant challenges. Global supply chain disruptions have hindered the industry’s ability to meet the increased demand experienced during the pandemic. As supply issues eased, consumer demand waned, leaving retailers with surplus stock that had to be discounted. This challenge has been further exacerbated by inflation and weakened consumer confidence.
Wiggle entered administration last October with debts amounting to £155 million. As a result of the deal with Frasers, 447 employees will lose their jobs.
Frasers is believed to be drawn to Wiggle’s robust social media and online presence, seeing potential for the brand to bolster its efforts in elevating its sports business. The company has refrained from providing further comments on the acquisition.
Last week, Halfords issued a warning to investors, anticipating pre-tax profits to be approximately 25 per cent below expectations, partly due to sluggish demand for cycling equipment. The company also highlighted widespread discounting in response to the challenges in the cycling market.