The new owner of Wiggle and Chain Reaction goes public, plans US 'acceleration'

NEW YORK (BRAIN) — After a merger with Signa Sports United — which calls itself "the hidden champion of sports e-commerce" — well-known bike e-commerce sites Wiggle and Chain Reaction are part of a publicly-traded retail group with about $1.8 billion in annual sales, much of it in the bike segment.

This week WiggleCRC, the parent of Wiggle.com and ChainReactionCycles.com, merged with Germany's SSU, which has gone public after being acquired by Yucaipa Acquisition Corporation, a special purpose acquisition company (SPAC). 

The combination of Yucaipa, SSU and WiggleCRC was announced in June but only completed this week after board members of Yucaipa and SSU approved the merger. Yucaipa was already traded on NYSE under the YAC symbol, but as of Wednesday the renamed company is being traded as SSU. 

SSU is little known in the U.S., but claims to be the world's largest online bike retailer, shipping 300,000 complete bikes in 2020. Prior to the WiggleCRC merger, its primary bike sites included bikester.com and Probikeshop.com. Its forecast total 2021 sales, across bike, outdoor, tennis and team sports, is forecast at $1.1 billion prior to the merger.

The merger gives SSU another $500 million in forecast revenue from WiggleCRC and gives SSU more exposure to the U.S. and U.K. markets. While SSU's revenues (prior to the merger) were 96% from Europe and the remainder from the U.K., WiggleCRC’s revenues are 58% from the UK, 20% from Europe, 7% from the U.S. and 15% from the rest of the world.

The combined company hopes to “accelerate” sales in the U.S. in all its sports categories, according to public statements. SSU recently acquired U.S.-based MidwestSports.com and TennisExpress.com, and with those brands plus the WiggleCRC merger, it will generate about 9% of its revenues in the U.S.

“Geographically, we have our stronghold in Europe, where we are the clear market leader. We see continued growth in Europe, but also a major opportunity to replicate this success in the US, which, despite its massive market size, is less mature from an online market development standpoint, with no scaled operators,” SSU CEO Stephan Zoll said in a June investor presentation. 

Zoll noted that 89% of the bike products it sells online are not available on Amazon. That’s in part because SSU has developed its own private label products, which generate about 18% of its revenues. IN the e-bike market, 30% of SSU’s sales are of private label bikes. 

SSU’s bike brands include Fixie, Inc., SERIOUS, Votex, Ted Cycling Products and Ortler.

SSU is little known in the U.S., but claims to be the world's largest online bike retailer, shipping 300,000 complete bikes in 2020.

WiggleCRC also owns some of the bike brands it sells, including Vitus and Nuke Proof. 

Chain Reaction and Wiggle merged in 2016. In 2018 Chain Reaction announced it would stop selling Shimano products to North American customers. In 2016 SRAM had instituted new policies that got its products taken off European e-commerce sites including Wiggle and Chain Reaction.

SSU closed at $10.25 per share on Wednesday.