Wiggle aquire Chainreaction and Bike24

xxyyzz

I read this rumour on a club forum but can't find anything online. Has anybody heard anything.

edit:
http://www.bikebiz.com/news/read/wiggle-set-to-acquire-chain-reaction-cycles/019056

Alek

Interesting, but I'd be very surprised should this happen.

rollingscone

The article I found suggested that neither party was willing to confirm or deny.

Usually bad news when main players get absorbed.

godtabh

Alek wrote: »

Interesting, but I'd be very surprised should this happen.

Me too. Just on an Ireland/UK basis it would kill competition over night (I know there are other options but these are probably the biggest 2)

ted1

I find CRC to win in price each time , hope it's not true

Alek

On the contrary, in my experience days when CRC was the cheapest place around are long gone....

godtabh

I find CRC better on price and delivery generally but I always shop around

Alek

Fair enough, they are unbeatable with delivery times. Except for swimcyclerun.ie (from what I've heard) no other online shop has 1 day (effectively) delivery in Ireland. And its free.

But if you are not in rush, its hard to beat Germans on prices. They charge for delivery though, but there are ways around it sometimes

Junior

It seems as if CRC's biggest market is outside of UK & IRL.. Evans Cycles sold last year for 100 Million Sterling.

Tenzor07

It's only bad news for the competition!

The buying power of these two combined would make them one of the or probably the biggest online cyclesport retailer in the world...

They were already in trouble with U.S based bike retailers for selling goods cheaply to American customers...

mossym

Alek wrote: »

Fair enough, they are unbeatable with delivery times. Except for swimcyclerun.ie (from what I've heard) no other online shop has 1 day (effectively) delivery in Ireland. And its free.

But if you are not in rush, its hard to beat Germans on prices. They charge for delivery though, but there are ways around it sometimes

agreed, the german shops always cheaper than anything UK or Ireland based.

godtabh

Tenzor07 wrote: »

It's only bad news for the competition!

The buying power of these two combined would make them one of the or probably the biggest online cyclesport retailer in the world...

They were already in trouble with U.S based bike retailers for selling goods cheaply to American customers...

The Americans giving out about out a capitalism. Shocking!

Beasty

mossym wrote: »

agreed, the german shops always cheaper than anything UK or Ireland based.

I've a "casual" membership of British Cycling which gives me 10% off CRC (even when already discounted). I get a minimum 12% off Wiggle with my platinum discount. I find I can usually get a lot of (particularly routine) stuff from one or other as cheap if not cheaper than on the continent.

The recent strength of sterling has made CRC and Wiggle less competitive, but that's starting to reverse now, meaning they could well become cheaper even before the discounts.

I don't see any competition authority standing in the way of a merger. I suspect both brands will be maintained, certainly short term, but they will be able to get stuff in cheaper and improve their margins that way. I don't see them pushing up prices, as that would leave an opportunity for someone else to fill the space left by the 2 merging.

Tenzor07

godtabh wrote: »

The Americans giving out about capitalism. Shocking!

Not really, it's not that the two companies are using a clever and inventive sales strategy, more exploiting the fact that manufacturers are supplying European retailers like CRC/Wiggle at less than the U.S MSRP...

godtabh

Tenzor07 wrote: »

Not really, it's not that the two companies are using a clever and inventive sales strategy, more exploiting the fact that manufacturers are supplying European retailers like CRC/Wiggle at less than the U.S MSRP...

That's capitalism at its finest!

Tenzor07

godtabh wrote: »

That's capitalism at its finest!

Exploitation.. same thing I guess!

mossym

Beasty wrote: »

I've a "casual" membership of British Cycling which gives me 10% off CRC (even when already discounted). I get a minimum 12% off Wiggle with my platinum discount. I find I can usually get a lot of (particularly routine) stuff from one or other as cheap if not cheaper than on the continent.

.

the likes of tires and that can generally be gotten at a much bigger discount. the uk sites will advertise Gp4000's "on sale " at >40 euros a pop, the german sites will have them constantly (not on time limited sale)for 30 to 31 euros. i find cassettes and chains similar. the difference on bigger items can be significant too. cheapest i could find a specific turbo model was 500+ on uk site(wiggle i think), german site was <370.

where i do find the german sites struggle is clothes, wiggle/crc much better for those, but i also tend to use LBS for those more than online.

godtabh

Tenzor07 wrote: »

Exploitation.. same thing I guess!

No thats how the free market works.

A combined CRC and Wiggle could easily put the likes of Swim Cycle Run out of business if they really wanted to in terms of price but probably wont as SCR has a nice niche in their next day deliver (and general great CS).

I handt realized that Merlin went for £100m. Assuming a lot of that was stock and a big customer base

My point is that the Americans are competing on price but the likes of SCR have a differentiation

RobFowl

Beasty wrote: »

I've a "casual" membership of British Cycling which gives me 10% off CRC (even when already discounted). I get a minimum 12% off Wiggle with my platinum discount. I find I can usually get a lot of (particularly routine) stuff from one or other as cheap if not cheaper than on the continent.

They are excellent offers !

Suspect this will actually open the market a little as wiggle and crc tend to offer similar lines, others do better niche deals and this may allow them to expand a little.

CramCycle

I have found wiggle to be consistently cheaper for the last 2 or 3 years, but CRC have a better delivery time.

C3PO

http://www.bikeradar.com/news/article/wiggle-to-purchase-chain-reaction-cycles-46354/

Hmm ... Looking likely!

Sinbad_NI

Hope not. CRC warehouse is close to work. Very handy.

Cee-Jay-Cee

I check them all when buying and rarely buy from the same place twice in a row although CRC and Wiggle would both get most of my custom but recently Ribble, PBK and PBS have had better prices (inc shipping costs at times) than the others.

Bike24, Bike-Discount, 4theBike and Jedi-Sports always seem to be better for larger, more expensive items.

I can't see a merger by the two effecting prices too much...I hope.

ILIKEFOOD

will be visiting my dentist whose dad works for them tomorrow. .I'll try and wiggle it out of him

Eamonnator

ILIKEFOOD wrote: »

will be visiting my dentist whose dad works for them tomorrow. .I'll try and wiggle it out of him

I hope, the dentist doesn't have to do any wiggling.

cromcruach

Really hope this doesn't mean loss of jobs and warehouses in Ballyclare. It's on my way back from work and it's fantastic being able to drive into a shop that stocks everything and has website prices!

Get my servicing done there too, always good and they throw in a lot of stuff gratis. And never blink twice at any weird Campag requests.

PowerToWait

I bought my first proper bike off them in 1992. A grey Marin with obligatory purple trim. Drove up and collected.

Was just a young fella and his oul lad in a pokey shop. Incredible how they grew.

Eamonnator

C.R.C sponsored an MTB race, that I organised in Ravensdale in '95 or '96

PringleDemon

CRC have been actively looking for a buyer for some time now. It's the logical thing to do for them , they have made a £200M personal fortune. I think I could retire on that.

CRC sponsor a lot of local racing from Cyclocross in NI to some of the Enduro scene . Can't see Wiggle being to interested in doing that. What next for the Sean Kelly Pro Team ?

mossym

why do people think CRC is going away? i'd say nothing will change, just the owners. it's a well established brand, with a huge customer base. even if this merger does go ahead, i imagine it will be business as usual.

seamus

mossym wrote: »

why do people think CRC is going away? i'd say nothing will change, just the owners. it's a well established brand, with a huge customer base. even if this merger does go ahead, i imagine it will be business as usual.

Yeah, I'd be surprised if they even rebrand as Wiggle tbh.

godtabh

mossym wrote: »

why do people think CRC is going away? i'd say nothing will change, just the owners. it's a well established brand, with a huge customer base. even if this merger does go ahead, i imagine it will be business as usual.

The brand might not change but what it sells and at what price may. A merger like this generally isnt good for the consumer. Wiggle CRC may benefit form a greater buyer power but it remains to be seen if this will be passed on to customers.

At the end of the day there are plenty of other places to buy from so I'm not worried.

OleRodrigo

It depends on how many customers are walk-in, or are web based. If the majority are web based, then it doesn't matter where the warehouse is so Wiggle could subsume it into their existing business.

They could potentially save a fortune by combining warehouse and internet operations, which is bad news for local employment.

Eamonnator

C.R.C. currently have about 500 employees.
I hope their jobs are secure.

smacl

Beasty wrote: »

I've a "casual" membership of British Cycling which gives me 10% off CRC (even when already discounted). I get a minimum 12% off Wiggle with my platinum discount. I find I can usually get a lot of (particularly routine) stuff from one or other as cheap if not cheaper than on the continent.

You're clearly a customer worth fighting for. Maybe if you took your business elsewhere the pair of them would collapse :pac:

Macy0161

I don't really find much price difference between the two - more price matching than undercutting.

Normally just go for CRC for island of Ireland reasons, but the last few orders swimcyclerun has beat them both for price, and it is actually next day delivery every time for me (unlike CRC's premium delivery which continues to be hit and miss for me), and it's free delivery.

Have to agree though - the consumer rarely benefits in such circumstances. Wiggle do a fair amount of UK sponsorship though, don't they, so doesn't necessarily mean the end of that if CRC is taken over.

mossym

has it been clearly said that this is a merger? Everyone seems to be assuming they'll merge into one entity. Wiggle may be very impressed with the business model/books of CRC and this is an acquisition to take ownership of the revenue stream, whereby they will leave the company as is. half the cycling world is owned by the same few small companies who maintain very different brands, no reason the resellers should be any different.

of course they leverage economies of scale if they merge IT/distribution systems. of course they get more buying power if they combine. but there is plenty of histories of M&A where this hasn't happened, (
Sunday Business show this week was talking about Van Heusen, who own Calvin Klein and Tommy Hilfiger among many others. They still haven't moved all these brands to one IT/accounting system, and they all operate separately, although it's claimed it will happen in 2016 ) so until it goes ahead it's only guesswork.

Beasty

mossym wrote: »

has it been clearly said that this is a merger?

Even if they retain the 2 brands there is nothing to stop them running both from a single entity (limited company), and there are certainly some economies of doing so.

There is though one potentially significant benefit of retaining CRC as a separate legal entity run out of NI (and indeed Wiggle transferring it's own activities to NI) - that's the proposal for NI to reduce its corporation tax rate to match the Irish rate

OleRodrigo

From Bridgepoint Capital, who own Wiggle:

Bridgepoint seeks to acquire companies with strong market positions and earnings growth potential where significant additional value can be created through expansion and operational improvement.

http://www.bridgepoint.eu/en/what-we-do/

Doesn't look much like a casual acquisition

mossym

Beasty wrote: »

There is though one potentially significant benefit of retaining CRC as a separate legal entity run out of NI (and indeed Wiggle transferring it's own activities to NI) - that's the proposal for NI to reduce its corporation tax rate to match the Irish rate

indeed, look at Tyco naming Cork as HQ for it's new organisation. although i'm sure that's for the beamish.

seamus

Beasty wrote: »

Even if they retain the 2 brands there is nothing to stop them running both from a single entity (limited company), and there are certainly some economies of doing so.

There is though one potentially significant benefit of retaining CRC as a separate legal entity run out of NI (and indeed Wiggle transferring it's own activities to NI) - that's the proposal for NI to reduce its corporation tax rate to match the Irish rate

There's a lot of strategic advantage in having another distribution centre too.

They sell worldwide but distribute from the UK. If they're planning to expand their distribution locations, it would make sense to start by acquiring someone like CRC who are already established and are in the same jurisdiction.
So merging is far easier, then say acquiring a business in Australia.

ILIKEFOOD

Eamonnator wrote: »

I hope, the dentist doesn't have to do any wiggling.

seems to be legit

dogsears

A transaction like this is most likely going to be subject to Competition Authority approval before being final so there could be a couple of months delay between now and completion.

I believe there is concern locally about potential for job losses arising out of efficiencies that can be made e.g. they won't need 2 IT depts etc, even if they do maintain separate brands, so the potential lower corporation tax rate for NI could be a very significant factor in this.

Jim Stynes

Disappointed to hear that wiggle have bought Chainreaction cycles. Rumours are they have bought some warehouse in Birmingham that is 3 times the size of CRC's. Hopefully this doesn't mean job losses and stores closing over here. Plus the price of things will no doubt increase.

dastardly00

There is a thread here already Jim:
http://touch.boards.ie/thread/2057559339

Jim Stynes

Oh sorry lads. Had a look and missed it somehow.

ted1

dogsears wrote: »

A transaction like this is most likely going to be subject to Competition Authority approval before being final so there could be a couple of months delay between now and completion.

I believe there is concern locally about potential for job losses arising out of efficiencies that can be made e.g. they won't need 2 IT depts etc, even if they do maintain separate brands, so the potential lower corporation tax rate for NI could be a very significant factor in this.

Corporation tax only needs 1 man in a office , the warehouse can still go . Say good bye to free deliveries for items over €9

C3PO

ted1 wrote: »

Say good bye to free deliveries for items over €9

Over the last few years I've increasingly bought from the German sites only really using CRC for smaller (free delivery) and urgent purchases. Their pricing is no longer competitive with the Germans. With this merger I suspect that gap will grow as Wiggle try to recoup what will be a major investment!
Like other posters I would worry for all the local racing that CRC support.

Beasty

Threads merged

Kaisr Sose

Beasty wrote: »

There is though one potentially significant benefit of retaining CRC as a separate legal entity run out of NI (and indeed Wiggle transferring it's own activities to NI) - that's the proposal for NI to reduce its corporation tax rate to match the Irish rate

CRC have already established CRC Ireland ltd, based in Cork. The company provides 'transaction services' but the choice of location would indicate it's located in ROI so as to avail of our lower corporation tax rate.

I have not found CRC (or Wiggle) competitive for a long time. Free delivery over a certain value is all it offers but if you can save more than the postage ex Germany (with just as quick a delivery time) it's not a benefit either.

ted1

C3PO wrote: »

Over the last few years I've increasingly bought from the German sites only really using CRC for smaller (free delivery) and urgent purchases. Their pricing is no longer competitive with the Germans. With this merger I suspect that gap will grow as Wiggle try to recoup what will be a major investment!
Like other posters I would worry for all the local racing that CRC support.

You won't get a pair of brake pads or a chain delivered from Germany as you would from CRC, same with wiggle