Wiggle Reaction

poppit
poppit Posts: 926
edited February 2016 in Road general
Wiggle buying Chain Reaction, didn't see that coming!
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Comments

  • bendertherobot
    bendertherobot Posts: 11,684
    Indeed. I hope that they maintain their NI presence. I worry that they won't.
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  • step83
    step83 Posts: 4,170
    bendertherobot wrote:
    Indeed. I hope that they maintain their NI presence. I worry that they won't.

    Logistically I could see it being useful they Wiggle have the site in Portsmouth but nothing else. So a depot further up north would help, but then they would probably do a cost based decision on this anyway.
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  • londoncommuter
    londoncommuter Posts: 1,550
    I never buy anything from CRC but all the same it's bad when any element of competition is removed. Shame.
  • markhewitt1978
    markhewitt1978 Posts: 7,614
    I think that's a pity because there's often stuff on Chain Reaction you can't get on Wiggle, and they have some good prices. So them basically disppearing - as I assume will happen - is all for the worse.
  • bendertherobot
    bendertherobot Posts: 11,684
    Step83 wrote:
    bendertherobot wrote:
    Indeed. I hope that they maintain their NI presence. I worry that they won't.

    Logistically I could see it being useful they Wiggle have the site in Portsmouth but nothing else. So a depot further up north would help, but then they would probably do a cost based decision on this anyway.

    They have a new big place in Wolverhampton
    My blog: http://www.roubaixcycling.cc (kit reviews and other musings)
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  • bigmat
    bigmat Posts: 5,134
    That's a shame, less competition = less choice and higher prices. On the plus side, I wonder if British Cycling will get a decent discount going again - the 10% on orders over £99 at CRC was pretty rubbish.
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  • buckmulligan
    buckmulligan Posts: 1,031
    Blimey, that is a surprise. Doesn't sound like good news :(
  • wolfsbane2k
    wolfsbane2k Posts: 3,056
    What? Oh b*gger, there goes the competition. Where was this announced?
    Intent on Cycling Commuting on a budget, but keep on breaking/crashing/finding nice stuff to buy.
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  • richk
    richk Posts: 564
    Wolfsbane2k wrote:
    What? Oh b*gger, there goes the competition. Where was this announced?

    http://road.cc/content/news/178413-wigg ... ion-cycles

    http://www.bikebiz.com/news/read/wiggle ... les/019056
    There is no secret ingredient...
  • bendertherobot
    bendertherobot Posts: 11,684
    There are a load of ramifications. One will be what happens to Vitus Verenti and Eastway? Will they retain all of them? Or ditch one.
    My blog: http://www.roubaixcycling.cc (kit reviews and other musings)
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  • flasher
    flasher Posts: 1,734
    Interesting, I wonder how much the joint company will make, online customers shop to a price and have no real loyalty.

    I'd have thought that the money Wiggle would use to purchase CR would be better used in massive discounting and driving other online businesses to the wall, thus gaining bigger market share.
  • bsharp77
    bsharp77 Posts: 533
    Flasher wrote:
    Interesting, I wonder how much the joint company will make, online customers shop to a price and have no real loyalty.

    I'd have thought that the money Wiggle would use to purchase CR would be better used in massive discounting and driving other online businesses to the wall, thus gaining bigger market share.

    Good point Flasher.

    Wiggle had already upped their game with a fantastic new DHB line before christmas, their Lifeline brand is expanding by the week and offers crazy value - and the new Cosine wheels look very good too...I hope this takeover business doesn't slow the progression on these fronts.
  • MisterMuncher
    MisterMuncher Posts: 1,302
    CRC only really do own-brand bikes, everything else is branded product. As such, the merger/takeover shouldn't affect DHB or Lifelines. I would imagine the different bike brands would get set up for different market segments: Vitus has some cachet and pro-cycling presence so becomes the premium line, Verenti the middle and Eastway the entry-level.

    It's odd that such a behemoth operation won't be carrying bikes from Spesh, Trek, Cannondale, Giant etc. though, assuming existing brand agreements stay in place.
  • nicklong
    nicklong Posts: 231
    It all depends on what you see as the competition. Wiggle and CRC were fighting over the same share of the market, they were too "cheap" to attract the prestige brands who want a shop presence and don't want to become a discount brand (de Rosa?).

    If you look at the EU and worldwide marketplace, then Wiggle & CRC are up against the big German retailers like Rose, Bike24, Alltricks etc which are very often cheaper and stock different merchandise. Interestingly, the CRC French website was far more polished than Wiggle.fr and so I can see how they had much better overseas sales. You don't see any DHB in France (Ekoi takes a similar spot for good quality cheap stuff).
  • NeXXus
    NeXXus Posts: 854
    I'm almost certain this is nothing more than shenannigans
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  • Dodger747
    Dodger747 Posts: 305
    Doesn't really change the scene that much - as already mentioned above, there are lots of continental European businesses still around...
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  • redvision
    redvision Posts: 2,958
    I think this can only be bad news for customers in the long run as i expect prices may rise to pay for the purchase of CRC.

    One thing which no-one (unbelievably) has asked about though....will this affect the free haribo's?!!!!! :lol:
  • flasher
    flasher Posts: 1,734
    redvision wrote:
    I think this can only be bad news for customers in the long run as i expect prices may rise to pay for the purchase of CRC.

    I wouldn't be so sure, there's still plenty of alternatives, Halfords, Ribble, Merlin, Evans, Probikekit etc. So they'll have to stay competitive or lose market share.
  • williamt1688
    williamt1688 Posts: 13
    less competition smells bad news imo :cry:
  • Devastazione2
    Devastazione2 Posts: 98
    If a company is aquired it means that company is doing bad. Never had an issue with CRC but their prices were very uncompetitive lately. Also,the latest website they came out with made navigation a mess imho. Hooked up with their german competitors and never looked back.
  • evs78
    evs78 Posts: 133
    Devastazione2 wrote:
    If a company is aquired it means that company is doing bad.

    If this is a general comment then I would totally disagree. Lots of high quality growing businesses are acquired by (often larger) competitors. CRC has suffered a bit of a decline from its market leading days in 2007-2011, but still made around £5m profit last year.

    One of the big issues for Wiggle since it was acquired by Bridgepoint (a private equity firm) for £180m (a pretty lofty price) has been the ability to expand overseas sales. Approx 40% of CRC's sales come from overseas so a good fit. I would imagine there will be some decent synergies from sticking the two businesses together.
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  • gweeds
    gweeds Posts: 2,613
    Devastazione2 wrote:
    If a company is aquired it means that company is doing bad.

    Nonsense.
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  • Devastazione2
    Devastazione2 Posts: 98
    Evs78 wrote:
    Devastazione2 wrote:
    If a company is aquired it means that company is doing bad.

    If this is a general comment then I would totally disagree. Lots of high quality growing businesses are acquired by (often larger) competitors. CRC has suffered a bit of a decline from its market leading days in 2007-2011, but still made around £5m profit last year.

    One of the big issues for Wiggle since it was acquired by Bridgepoint (a private equity firm) for £180m (a pretty lofty price) has been the ability to expand overseas sales. Approx 40% of CRC's sales come from overseas so a good fit. I would imagine there will be some decent synergies from sticking the two businesses together.

    So you're basically saying what I've just said. CRC's decline from it's market leading days. Wich means they either invest heavily ( debts) or get acquired,at least most of the workforce will stay in place.
  • redvision
    redvision Posts: 2,958
    Could be that Chainreactions biggest market was abroad which happened to be Wiggles smallest market. Therefore, for Wiggle it would make sense to buy them.
  • flasher
    flasher Posts: 1,734
    redvision wrote:
    Could be that Chainreactions biggest market was abroad which happened to be Wiggles smallest market. Therefore, for Wiggle it would make sense to buy them.

    But only if the combined Wiggle/CR keep to CR's previous pricing.
  • apreading
    apreading Posts: 4,535
    I think this probably also has alot to do with the massive reduction in corporation tax about to take place in Northern Ireland. Expect Wiggle head office to close, with the CRC head office becoming the registered address for both companies.

    What will be interesting is how they cope with running both identities - as both are established players on the internet with loyal (as loyal as they can be online) customer following. They may just run the same website/shop but accessing it via either URL brings up that website with a different logo at the top. Or they may try to create an 'identity' for each and even sell different stock. But will each run independant promotions and have different pricing etc???

    As its an investment firm at the root, they may also choose to keep sufficient separation that they could split them again in the future - how would this work???
  • germcevoy
    germcevoy Posts: 414
    A buddy working for the CRC IT team was told today that the merger is real and will be confirmed formally next week. He knows nothing more beyond that.
  • hpbike
    hpbike Posts: 1
    This does not surprise me at all. With Sram (and a few others) getting ready to start limiting where there product can be shipped these large websites will have to merge. It is my understanding that in a couple months European websites will not be able to ship Sram to the USA and other countries. Also with Shimano lowering prices in the USA this will all start to hurt these UK sites. I also guess Shimano will not be far behind in doing what Sram is doing with limiting trade. This could be really good for the IBD.
  • paul_onabike
    paul_onabike Posts: 194
    So its a merger then - not good for UK competition, but OK for Europe and the rest of the world.

    A problem for us within the UK, in that the other big online shops (Rose, Bike 24 etc) trade in Euros prices, and that is not consistent pricing for us due to varying exchange rates. Rose also trade with typically a 5% mark up in GBP when converting from euros - and you cant checkout in euros to the UK - so OK when the exchange rate is favourable - but recent falls in value have impacted negatively on goods pricing from abroad.
    Expect a lot less in the way of competitive pricing, and the demise of all the special discount promotions. Wiggle very rarely have discount offers now, whereas they used to discount regularly.

    The regulators now favour mergers of similar companies so that they can compete in the global market, quite often at the expense of the local market. Look how BT have been allowed to take over EE - how does that help UK consumers.
  • apreading
    apreading Posts: 4,535
    The advantage to paying in GBP from Rose, comes when you need to return something becuase presumably they refund what you paid in GBP.

    When I have bought something in Euros then returned it, the refund is different to what I paid. In fact, I have even lost out when All4Cycling charged me, then found the item out of stock, then refunded me - I still lost money on the deal.

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