Halfords join the bidding for Wiggle CRC

simonekarl

https://news.sky.com/story/halfords-joins-ride-to-rescue-of-online-retailer-wiggle-13009513

What's your thoughts, good news or bad? I think it's better than Fraser Group...right?

super_davo

simonekarl said:

https://news.sky.com/story/halfords-joins-ride-to-rescue-of-online-retailer-wiggle-13009513

What's your thoughts, good news or bad? I think it's better than Fraser Group...right?

Good. Halfords get a bad rep but they are a lot of peoples entry point into cycling.

Wiggle CRC are fundamentally sound business with many strong points and the reason they are in trouble is much more to do with being saddled with debt following the takeover than anything structural. The website redesign was awful but that's not the main source of problems and should be easily fixed. Halfords have deep enough pockets to clear the debt and sort that out, and could even add distribution via the Halfords shops, which would be a very good thing.

Not sure where that would leave Tredz though.

me-109

They're on the cards for a merger themselves, which could make a further acquisition unrealistic at this time, particularly as they already feel their business was undervalued. Would the combination of Halfords, Tredz and WCRC pass under the radar for the Monopolies Commission?

daniel_b

Polpot would be better than ashley. When I think of all the once decent brands/businesses/shops he has utterly censored, pillaged, ruined and devalued

I'd definitely carry on shopping there if Halfords acquired them - not had any issues with Halfords myself, and though I know their bike build quality can be variable, I'd support them for sure.

I'd rather like to see someone like Sigma, Merlin or even Balfe's bikes acquire them, but I don't know whether they would have the reserves to do so - wouldn't want to risk any of them going down as well.

Balfe's gave me the best customer service on a C2W bike I think I have ever had, all the way through completing the form, keeping me updated, and the acid test was when it came with a different specced crankset, which is entirely at the manufacturers discretion, but they took my point, upgraded me, changes it out and the BB, and didn't even charge me for labour, which I would have been happy to pay.

I know they are growing fast, mostly across London, but I suspect it would be too soon for them to acquire Wiggle/CRC.

simonekarl

Great points. I get really frustrated that I have buy bike bits online, whils tI support the LBS, they usually don't carry much stock. Perhaps if Halfords carried some more 'higher end' bits and distributed Wiggle CRC parts, that could be a winner.
But glad we are all aligned that Fraser Group would be bad.

pblakeney

Just pointing out that us all being aligned means absolutely nothing in the corporate world.

dannbodge

Not a massively bad thing.
What would be great is they bring in some of the DHB/Prime into the shops.

Being able to try on jerseys/actually look at bits before buying would be awesome.

Never had an issue with Halfords. The mechanics are pretty much useless but then they just follow instructions for everything.

katani

daniel_b said:

Polpot would be better than ashley. When I think of all the once decent brands/businesses/shops he has utterly censored, pillaged, ruined and devalued

I'd definitely carry on shopping there if Halfords acquired them - not had any issues with Halfords myself, and though I know their bike build quality can be variable, I'd support them for sure.

I'd rather like to see someone like Sigma, Merlin or even Balfe's bikes acquire them, but I don't know whether they would have the reserves to do so - wouldn't want to risk any of them going down as well.

Balfe's gave me the best customer service on a C2W bike I think I have ever had, all the way through completing the form, keeping me updated, and the acid test was when it came with a different specced crankset, which is entirely at the manufacturers discretion, but they took my point, upgraded me, changes it out and the BB, and didn't even charge me for labour, which I would have been happy to pay.

I know they are growing fast, mostly across London, but I suspect it would be too soon for them to acquire Wiggle/CRC.

Halfords run our C2W scheme at work and their customer service, as well as Tredz's one, was always brilliant for the past 3 years I have been with them too. The letter was always issued on the next day after the approval, except the first one which was delayed a week, so I gave them a ring and the guy on the phone emailed it to me straight away. Any issues with the bits I purchased, replacements, returns, warranty issues also never a problem.

N0bodyOfTheGoat

I'd rather Halfords bought them out rather than Ashley, but in the current bike climate, neither is likely to give us buyers better deals.

katani

N0bodyOfTheGoat said:

I'd rather Halfords bought them out rather than Ashley, but in the current bike climate, neither is likely to give us buyers better deals.

Myself being a foreigner and knowing what price "deals" some of the rest of the world outside UK are getting on biking stuff, especially at Black Friday, post season sales, the customer here is spoilt beyond belief already . At least with reductions on the RRP, which we all know are a massive rip-off to begin with.
Why does a set of the cheapest, decent bike lights that will last more than one winter season have to cost +£50, when the same set made for a less-elitist lifestyle activity costs 1/5 of that? Etap handlebar blips for my bike are £80, when I can get switches with the same type of mechanism in my local electrical supplies shop for £5.99 per unit.

redvision

Bad. A merger would be a real negative for the consumer. Just the same as when wiggle bought crc, and even halfords with tredz.

Essentially they would just be extending their chain which means less competition, never a good thing!

Although would be good for the employees as assume it would save at least some of their jobs, so that's a positive.

slowmart

A wiggle/ CRC acquisition would not align with Halfords current strategy of growing their business by increasing their motoring capability as Halfords have already acquired a number of mot/ tyre fitting businesses and are currently digesting and assimilating those companies. According to their companies annual report the newly acquired businesses are not hitting revenue targets which could have a knock on effect on other parts of the business. Not least the current exec teams ability to make any new acquisition work from the board and shareholders perspective. So band width from the leadership team to make a deal work post purchase is another aspect which makes it look doubtful to me. The lack of progress with integration and shortfall in generating income and profit from the previous acquisitions would probably translate to increased interest in any credit line required to finance the purchase of Wiggle.

Treadz already captures the mid to high end market.

Despite a cash bargain in terms of buying the business the headwinds are quite high for Halfords to complete a deal.

Best guess is a third party is trying to disturb the current suitors thinking and make them reconsider and increase their initial offer …….

Interesting times in the cycle industry for sure.

me-109

Another decent LBS near me appears to have folded, so the options on in person browsing and purchases has reduced even further, placing more reliance on online shopping (arguably) at a time when that's folding too.

carbonclem

I just heard that our local Evans store (Cheltenham) closed with short notice. Things not rosy anywhere.

daniel_b

Owned by ashley though, so you know cuts will be made as and when.

trevor.hall12

I predict a few of the bigger names will fold after Christmas. the whole industry is in turmoil .
Shimano profits down 40% before tge crank fiasco ,Giant down 49% too .
It seems its to get worse for a while yet too

First.Aspect

It would be more sensible to compare pre-lockown revenues. But...

There are two key problems facing the industry. 1. Manufacturing capacity was ramped up to meet a transient demand. 2. The industry as a whole consciously moved to make equipment much more expensive to buy - which I personally think created higher margins (after all, why is a simple di2 lever more expensive than a complex mechanical one, when the former is far cheaper to make?).

There has also been a flagrant disregard for customers with this push towards manufacturer specific parts, a lack of back-compatibility and an unwillingness to agree on some basic standards for consumables.

Basically, the industry chased margins and new expanding markets and took the core existing market for granted. It did this immediately prior to a period of massive inflation and cost pressures around the world which has hit those margins and wiped out demand.

Personally, providing that it is still possible to buy a bike, I think a big re-set wouldn't be a bad thing. Bikes in particular should be 30%-50% cheaper than they currently are and shouldn't be getting anywhere near overlapping with the price of a car or a motorbike.

redvision

As above, the industry is in a mess because of overproduction and increasing pricing, but also because they assumed the newcomers to the sport (I'm talking about those who started during the pandemic) would follow the more passionate rider and want to upgrade parts and bikes regularly, whereas most haven't.

In my opinion wiggle were on the way down even before the takeover. What made them a great online store was the focus on cycling products as soon as they ventured out into other sports they were stretching themselves and starting to stray away from their foundations.

pangolin

redvision said:

As above, the industry is in a mess because of overproduction and increasing pricing, but also because they assumed the newcomers to the sport (I'm talking about those who started during the pandemic) would follow the more passionate rider and want to upgrade parts and bikes regularly, whereas most haven't.

In my opinion wiggle were on the way down even before the takeover. What made them a great online store was the focus on cycling products as soon as they ventured out into other sports they were stretching themselves and starting to stray away from their foundations.

Not sure about that. They have had a big camping range for over a decade.

davebradswmb

The problem is how do you do that without radically changing people's expections? We have been sold the idea that an entry level bike must have at least a carbon frame, carbon wheels and hydraulic disc brakes. A bike specced like that cannot be made to meet the £1,000 price point which is a far more realistic price for an entry level bike. You can buy a really nice aluminium bike with aluminium wheels and Tiagra gears for that kind of money and you really are not going to be at any real disadvantage to the guy who's dropped £10,000 on a Specialized Tarmac when pottering around your local lanes. Or else you can spend £2,000 and get a distinctly average carbon frame with crap carbon wheels, which is probably the minimum spec that many riders will accept, and then you still have to deal with the vaguaries of mechanical disc brakes.

pblakeney

davebradswmb said:

The problem is how do you do that without radically changing people's expections? ...

I think it is the industry/us that has skewed perceptions of what is "entry".
Joe Bloggs thinks £250 is expensive and someone keen coming in will target £1000.

super_davo

pblakeney said:

davebradswmb said:

The problem is how do you do that without radically changing people's expections? ...

I think it is the industry/us that has skewed perceptions of what is "entry".
Joe Bloggs thinks £250 is expensive and someone keen coming in will target £1000.

You also have to view prices in the context where everything has got more expensive. Before inflation went mental, the base for a road bike rather than BSO would have been the Triban 3 or Carrera TDF at £350-400. Now you're looking at equivalents for £500-600. You got serious at about £1000+. Now that's closer to £1500-2000. The new one might be disc and heavier etc. but that's an aside, they still occupy the same position in the market.

So bike costs have gone up, but in reality not any more than food. Difference is that you have to buy food whereas most bike purchases are discretionary or N+1. Plus the second hand markets are flooded with bikes people bought in lockdown and are selling because they don't use.

We're going to have an adjustment, it is going to be ugly, but there are enough people cycling or that want to be across all the various genres that things will recover in the long term.

pblakeney

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

pangolin

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

super_davo

pangolin said:

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

The increase in bike prices hasn't happened in a year, it's been going on since 2016 and the Brexit devaluation with a few jumps along the way. Changes in tech don't tell the whole story, not by a long shot (the base bike example being virtually identical spec for spec from 2016 to now).
On the other hand I could actually point to quite a few things on my weekly shop that have jumped in price by 50-100% since 2021, even if the headline inflation rate is less.

pangolin

You're agreeing with me.....

davebradswmb

Like for like bike prices haven't gone up 100%, or anywhere near. I bought a Triban RC500 about 8 years ago for £500, the equivalent RC520 is now £650 and that includes an "upgrade" to disc brakes. Like-for-like, bike prices haven't increased that much above inflation. What has happened is that for whatever reason, whether that be pressure from the industry to push ever more exotic components or from the consumer demanding the same, the expectations are higher. That Triban 500 I bought 8 years ago was an entry level bike, but many people's idea of entry level is at least the £2,000 bike. If you don't believe me, just read the reviews of entry level bikes one of the bike rags.

pblakeney

pangolin said:

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

Inflation went mental 1 year ago. That was my base point.
Anyone thinking carbon frame, hydraulic brakes and e-shifting is entry needs a rethink.

super_davo said:

...
You also have to view prices in the context where everything has got more expensive. Before inflation went mental,...

First.Aspect

pblakeney said:

pangolin said:

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

Inflation went mental 1 year ago. That was my base point.
Anyone thinking carbon frame, hydraulic brakes and e-shifting is entry needs a rethink.

super_davo said:

...
You also have to view prices in the context where everything has got more expensive. Before inflation went mental,...

Try finding a rim brake carbon/alu with decent mechanical shifting and nice lightweight alu rims.

I can find you a bso with a hideous alu frame heavy wheels and claris, though.

pangolin

pblakeney said:

pangolin said:

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

Inflation went mental 1 year ago. That was my base point.
Anyone thinking carbon frame, hydraulic brakes and e-shifting is entry needs a rethink.

super_davo said:

...
You also have to view prices in the context where everything has got more expensive. Before inflation went mental,...

Your base point was after 1 year of price rises which had resulted in a high inflation figure?

pblakeney

pangolin said:

pblakeney said:

pangolin said:

pblakeney said:

super_davo said:

...
You got serious at about £1000+. Now that's closer to £1500-2000.
...

Inflation is not at 50-100%.

Nor has the increase happened over 1 year

Inflation went mental 1 year ago. That was my base point.
Anyone thinking carbon frame, hydraulic brakes and e-shifting is entry needs a rethink.

super_davo said:

...
You also have to view prices in the context where everything has got more expensive. Before inflation went mental,...

Your base point was after 1 year of price rises which had resulted in a high inflation figure?

No. My base point was the time given by super_davo - "Before inflation went mental."
Anyway, all you are doing is agreeing with me that manufacturers are forcing trends and prices.