The parent company of WiggleCRC, Vitus Bikes and Nukeproof has suffered another blow this week after it revealed it was losing financial support totalling €150m.
In a statement to investors published on its website, Signa Sports United NV, the German sports eCommerce retail giant behind more than 80 online stores including Wiggle and Chain Reaction Cycles (not to be confused with Sigma Sports), announced on Monday that it had received a termination notice relating to a €150 unconditional Equity Commitment Letter from its own parent company, Signa Holding GmbH.
The statement explains that the agreement was initially penned on June 26, 2023, and included an unconditional commitment from Signa Holding to support the “operational financing needs” of its subsidiary.
The commitment was set to run between September 1, 2023, and September 30, 2025, essentially securing its going concern–or ability to operate–for that period.
However, after just €7m of that commitment had been spent, Signa Holding has pulled the plug, leaving €143m undrawn.
The statement does not provide any clarity or explanation on how, or even if, Signa Sport United will continue to operate without the funds.
Naturally, Signa Sport United adds that it considers the move “unjustified” and that it plans to “take the appropriate legal steps” on behalf of the interests of its shareholders, creditors and employees.
While it’s not confirmed, it appears the move is related to the announcement from Signa Sport United last week, in which it revealed “profitability challenges” and was planning an “accelerated strategic realignment and restructuring program,” which would likely include “the termination or winding down of non-performing assets.” It also announced it was set to delist from the New York Stock Exchange.
Notably, the news also came at the same time as Signa Holding announced it was offloading German sporting retailer SportScheck. According to a report from Morningstar, the 75-year-old brand was sold to British retail conglomerate Frasers Group PLC, the parent company of House of Fraser and Sports Direct.