Wiggle Chain Reaction parent company appoints liquidators

Mapil Topco Limited, the parent company of Wiggle Chain Reaction, has appointed a liquidator, the news coming not long after we first reported the deal for the beleaguered cycling retail giant's brand and intellectual property to be sold to Mike Ashley's Frasers Group.

An update posted on Mapil Topco Limited's Companies House page yesterday stated that Anthony Wright and Alastair Massey of FRP Advisory have been appointed as liquidators. The company's statement of affairs, also posted yesterday, will be available within the next 10 days.

At the start of the month we first reported the news that Wiggle Chain Reaction's brand and intellectual property was to be sold to Ashley's Frasers Group, which also owns Evans Cycles and Sports Direct, in a deal believed to be worth less than £10 million.

Rumours had been circulating about the deal for some time, with all 447 of WiggleCRC's employees being laid off in February as the administrators "closed the shutters", Frasers Group believed to have purchased some of Wiggle's in-house brands, such as Vitus, Nukeproof, dhb and Lifeline. 

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The saga began in the autumn, WiggleCRC entering administration and being put up for sale following a financial crisis that engulfed its Berlin-based parent company Signa Sports United (SSU), resulting in 105 jobs being cut at Wiggle, fellow online retailer Chain Reaction, and distributor Hotlines, and the company owing almost £27 million in debts to 400 creditors.

SSU's crisis was prompted by its own parent company, Signa Holding, removing a €150 million funding commitment, plunging Wiggle and other cycling businesses such as Bikester, Probikeshop and Farrhad.de into uncertainty. SSU filed for insolvency and months of decline, administration and redundancies followed for Wiggle and Chain Reaction.

"Considerable interest" was reported by the administrators who said they remained "optimistic" over the possibility of a sale amid "considerable trading profit", short-term business success fuelled by Black Friday discounts and stock clearance.

Ashley's Frasers Group, now run by his son-in-law Michael Murray, has reportedly agreed to purchase WiggleCRC's brand and intellectual property for a sum of less than £10 million.

"The assumption was Wiggle Chain Reaction wasn't going anywhere"

On last week's episode of the road.cc Podcast we heard from a former employee who spoke of staff's "shock" at the retail giant's demise.

"Everyone was convinced, this is it, we are one of the biggest bike retailers about. We're about to go massive in America, then it was like 'Oh, this might not be plain sailing, this is not good'. But I don't think anyone thought this was going to close the company," the ex-employee, who worked for one of WiggleCRC's in-house brands, told us of his response to the withdrawal of the funding commitment.

> "The assumption was Wiggle Chain Reaction wasn't going anywhere": Ex-employee talks "shock" at retail giant's demise on the road.cc Podcast

"Suddenly the bubble burst, and you've got a train you've geared up to full speed, and you're driving it flat out, then suddenly someone tells you you've run out of track. It was chaos, and you saw everyone hitting that. And I think the £150m combined with that – even with the £150m, there's no guarantee we would have survived. Maybe it got too big.

The former employee said the "random" job cuts seemed "brutally handled", with administration meaning nobody got their minimum notice period either.

"So they went from 'I have to get this report in by one o'clock' to 'sorry'. And fifteen minutes later they're sitting in a car in the car park going 'what has just happened?'

"Everybody believed this was going to work," he said. "We were too successful, we make too much money, we were too good at this. It's not like there was another competitor in the same market in the UK. You might be one of the unlucky ones who got cut, but the assumption was: Wiggle Chain Reaction wasn't going anywhere."

He also claimed that staff were told that the company was likely to be sold to a private equity firm, and that management even told staff: "Don't worry, Mike Ashley is not buying us".

"Even when we closed, there was no talk about Frasers Group, about Mike Ashley," he recalled. "We found out through media outlets, which is wild."