The parent company of Wiggle, Chain Reaction Cycles, and Vitus bikes, Signa Sport United (SSU) (not to be confused with Sigma Sports), has announced intentions to restructure its business and delist from the New York Stock Exchange, citing “severe liquidity and profitability challenges” in the wake of the COVID-19 pandemic.
In what is being described as an ‘accelerated strategic realignment and restructuring program,” the Berlin-based company, which also owns Nukeproof bikes and more than 80 e-commerce stores across multiple sports, says it is undertaking a “performance enhancement and downsizing program,” which may include “the termination or winding down of non-performing assets.”
In a company statement to investors, SSU explained that the move comes after it experienced a difficult 2023 plagued by “material disruptions,” amid a demand for products that remains “significantly below 2022 and pre-pandemic levels.”
This comes alongside the ongoing problem of elevated inventory levels that are affecting the bike industry.
The decision to delist from the New York Stock Exchange is said to be in response to the “limited liquidity and trading volume in the company’s publicly traded shares” following the business combination – or merger – with Yucaipa Acquisition Corporation in December 2021.
This was the same period at which it also acquired cycling e-commerce giant, Wiggle CRC.
“The Company’s Board of Directors has concluded that the benefits associated with being listed on the New York Stock Exchange (“NYSE”) do not justify the costs and demands of management’s time necessary to meet the Company’s US regulatory commitments,” the statement explained.
SSU predicts the completion of this delisting to be completed later this month, with the full suspension of its reporting obligations to be completed by the end of 2023.
The company’s share price has been on a steady decline since that merger, from $9.12 at its inception in December 2021 to $2.24 in August 2023, before plummeting to just $0.09 this week.
As part of the restructure, the statement confirms the measures will include “rightsizing of under-performing business units as well as the evaluation of disposals of non-core assets.”
Perhaps worryingly for the WiggleCRC brand, the statement specifically highlights the bike segment as an underperformer, stating that it “continued to lag management expectations.”
This is claimed to be due to “weaker consumer demand and elevated promotional…
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