One of the world’s largest bicycle retailers, Signa, has closed its US office and is preparing to file for bankruptcy for its subsidiaries in the coming days. WiggleCRC has entered a self-administration phase. Signa’s German e-commerce retailer, Tennis-Point GmbH, has filed for bankruptcy in Germany.
SIGNA Sports United NV (“SSU” or the “Company”) is a professional sports e-commerce company that conducts transactions in tennis, outdoor, and team sports on more than 80 online websites in addition to its bicycle industry operations.
The incident was triggered by SIGNA Sports United NV announcing the termination of unconditional equity commitments from SIGNA Holding GmbH, which had previously unconditionally committed to providing an additional €150 million in liquidity to the company from September 1, 2023, to September 30, 2025, to meet SSU’s operational financing needs and ensure its ongoing business operations. There is still €143 million unused, but SIGNA Holding suddenly announced the termination of the equity commitment, causing financial difficulties for the company.
SIGNA Sports stated, ‘Given the Company’s and SIGNA Holding’s years of mutual trust and reliable financing cooperation, SSU had continued to fund its recent obligations and assess the ongoing business of the Company and its subsidiaries in the light of the binding nature and unconditional character of the equity commitments. The Company believes SIGNA Holding’s termination of the equity commitments is unreasonable.’
Signa Sports United made this decision considering the ongoing macroeconomic headwinds, market oversupply, and the company’s ‘severe’ liquidity and profitability. Since the company delisted from the New York Stock Exchange (NYSE), its stock price has plummeted. In December 2021, it peaked at $9.21 per share, but by early September this year, it had fallen to $0.89 per share. Consequently, the owner of Wiggle/Chain Reaction Cycles (CRC) and bicycle brands Nukeproof and Vitus, Signa Sports United (SSU), announced a restructuring, including the termination or settlement of bad assets.
WiggleCRC, a major player in the bicycle market since its merger in 2016, faced challenges this year. As trade entered the ‘off-season’ and consumers experienced reduced disposable income due to inflation, brand inventories remained significantly oversupplied. However, its brand reshaping efforts did not receive widespread approval