There are many negative factors including Brexit, lack of liquidity and the government's anti-bike policies. But there is hope.
During the pandemic, the purchase of bicycles has experienced explosive growth: not just in the UK, however. This has led to an increase in the industry but the recent news on wiggle and Chain Reaction made us think.
Wiggle and Chain Reaction Cycles
Important e-commerce, and global points of reference, such as “Wiggle / Chain Reaction Cycles” have gone into receivership. The German company “Signa Sports United” has declared bankruptcy.
CAUSE OF THE COLLAPSE OF THE BIKE WORLD
During the pandemic, demand for bicycles has outpaced supply, resulting in long wait times. The smartest ones took advantage of it, like Benko, taking off as soon as the bubble was over (article). While others, endowed with passion and greater values, found themselves with an excess of inventory, since many companies had placed orders in advance. Then we add that consumers' purchasing power has decreased and that's it.
BREXIT PENALITIES THE BIKE WORLD
In the United Kingdom we also find another problem: high interest rates and trade barriers linked to Brexit have contributed to the crisis in the sector. British companies specialized in mid-range and high-end bicycles, and sales in Europe were a significant part of their turnover. However, slow customs and additional costs weighed on exports.
RISHI SUNAK AND HIS ANTI-BIKE POLICIES
There has been a reduction in funding for cycle paths and footpaths. Ok, this is a marginal aspect but it doesn't bring good air to the country. Simply put, the UK is experiencing a period of great uncertainty in the cycling industry. Despite all this, the UK currently generates around £7,5 billion of added value to the UK economy by employing around 64.000 people.
