IT infrastructure scared away potential buyers of struggling e-commerce site
- Reference: 1717128907
- News link: https://www.theregister.co.uk/2024/05/31/wiggle_it_infrastructure_sale/
- Source link:
Wiggle was a very highly regarded site, as it stocked an impressive range at keen prices. Its house brands – especially the DhB Lycra range – were vastly cheaper than many biking brands, some of which somehow charge $500 or more for a full set of skintight kit.
The site won friends around the world, because it shipped almost everywhere – swiftly. In some places it even teamed with local bike stores, so that customers could order bikes or parts and have a nearby mechanic do the dirty work. That arrangement appealed as the impact of global retailers that buy in bulk and offer deep discounts - thereby pricing locals out of the market - is an issue of concern in the cycling community.
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Wiggle was therefore mostly considered an example of e-commerce done well and thoughtfully.
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But after the COVID pandemic ended, the sporting goods market tanked – and Wiggle's parent company Signa Sports United (SSU) hit trouble. So much trouble that in October 2023 Wiggle and sibling brand Chain Reaction Cycles were placed in administration.
Receivers sought a new home for Wiggle, and on Wednesday posted a [4]progress report [PDF] that reveals the site's IT estate scared potential buyers away.
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"A going concern sale was not achievable due to the inability to right size the Company's operating fixed overheads, particularly the IT infrastructure," the report states.
That infrastructure "had been built on the assumption that the Company would achieve sustainable annual revenues in excess of £1bn."
Wiggle got nowhere near that mark – "even during peak sales through COVID-19 trading."
[6]Google goes shopping for Indian e-commerce dominance … at Walmart
[7]Lawsuit claims gift card fraud is the gift that keeps on giving, to Google
[8]What do Europeans, Americans and Australians have in common? Scammed $50M by fake e-stores
[9]Amazon had secret algorithm to hike prices, claims FTC
As would-be buyers considered Wiggle's ops, they saw its IT and ran away screaming.
Or, as the receiver put it: "The inflexibility of the IT infrastructure ultimately caused the parties considering a going concern purchase to all fall away."
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Twenty-four parties signed non-disclosure agreements allowing them to peruse Wiggle's affairs ahead of a possible purchase, and seven meet with management.
But the state of Wiggle's tech proved decisive: nobody was willing to buy and operate the brand.
Just why Wiggle’s IT infrastructure was so inflexible was not discussed. In these cloudy times, it’s certainly odd to build for colossal scale given the many vendors who promise elastic services.
Wiggle appears to have picked the wrong gear, literally and metaphorically.
This story does not end in a wipeout. One party decided to acquire "certain business intellectual property" for £3 million – underlining the notion that the deal-breaker was Wiggle's tech.
Maybe that sale of IP means Wiggle will one day again delight cyclists, even if its tech horrified buyers – the same reaction most people have when they see MAMILs. ®
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[4] https://regmedia.co.uk/2024/05/31/companies_house_document_w_realisations_formerly_wiggle.pdf
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[6] https://www.theregister.com/2024/05/27/google_invest_flipkart/
[7] https://www.theregister.com/2024/03/07/google_sued_for_profiting_gift_card_fraud/
[8] https://www.theregister.com/2024/05/08/bogusbazaar_fraud_china/
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[11] https://whitepapers.theregister.com/
It wasn't me, it was IT.
Ultimately, it comes down to the business management.
You can fix bad IT, you can't fix bad business decisions. Want to have 80 separate fiefdoms? Go ahead but don't blame IT when suddenly there are 100 different ERP systems and versions.
Oracle is the least of your problems if nothing works the same between two neighbouring countries/cultures/markets.
Not saying it happened here, but I've met plenty of CEOs who live by the motto "It wasn't me, it was I.T. which done it (or didn't do it ... normally like being asked to redefine gravity as "3")".
Re: It wasn't me, it was IT.
> Ultimately, it comes down to the business management
Agree, you only design and implement an IT infrastructure capable of supporting a £1bn business, because that is what management envisage the business becoming.
I expect the inflexibility is due to both the selected platform and contracts, ie. It won’t easily downsize to something more appropriately sized(*), I wonder if one of the major SI’s are involved.
(*) I have hit this problem with divestures, parent ran something like SAP/R3, new business would of used SAP’s entry level offering, only SAP had no migration tools - their business model assumes companies only get bigger… fortunately one of their competitors did have tools to migrate off SAP on to their mid market platform offering…
Whilst this article is interesting from an IT POV, it's disappointing to see the writer jump on the bandwagon of adopting a sneering tone about cyclists.
I'd ordered a lot of stuff from Wiggle over the years, good prices for running, gym and cycling kit and also the free bags of Haribo that came in the box were a welcome addition. Sadly Haribo were owed a lot of money apparently when they went in to administration. Got some tools very cheaply in the clearance sale though.
I'm only here for the sneering tone...
> it's disappointing to see the writer jump on the bandwagon of adopting a sneering tone about cyclists
It's the MAMIL stuff that you don't like?
I hear it more within the cycling community than outside, and given "a sneering tone" is The Register's usual tone, I don't see any issue at all. Quite the contrary.
Also it should be noted that they done their homework : to be able to say that one of the biggest selling point of Wiggle was DHB (it's like 90% of my cycling wardrobe and I'm wondering how I'll be able to replace those kits when they are done) means that they looked thoroughly about Wiggle.
I'm well aware of it within cycling sadly, there are plenty of gatekeepers who look at me with open disdain for riding a cheap bike and wearing baggy Endura shorts for most of my rides, cycling in general though is under attack from a lot of the media (legislation to prosecute dangerous cyclists for example and the overturning of a woman's conviction for causing a cyclist's death by shouting at her to get off a pavement and she ended up in traffic).
As for the kit, no idea if it's the same quality or manufacturer, but the "new" Wiggle/Sports Direct are selling at least some of the range, although I'm also well aware how a lot of people feel about Mike Ashley and his businesses. I've got a few base layers, a buff and a pair of the dhb Dorica MTB shoes myself and it's good kit for the price, although the sizing was often a bit on the wonky side.
A little while ago this was an Oracle success story...
https://blogs.oracle.com/retail/post/online-sports-retailer-wiggle-uses-oracle-to-support-double-digit-growth
Typical: blame the I.T department
" A going concern sale was not achievable due to the inability to right size the Company's operating fixed overheads, particularly the IT infrastructure "
" The inflexibility of the IT infrastructure ultimately caused the parties considering a going concern purchase to all fall away. "
What did Wiggles IT infrastructure run on. Why was it deemed inflexible and over provisioned. Just what prevented Wiggle from downsizing their IT infrastructure. Was it to do with inflexible contract lock-in terms?
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" Just why Wiggle’s IT infrastructure was so inflexible was not discussed. In these cloudy times, it’s certainly odd to build for colossal scale given the many vendors who promise elastic services.
Ah so, I should have read the whole article before rendering thoughts to pixels. Who was it designed their IT infrastructure? @PinchOfSalt provided this most interesting link:
[1]Online sports retailer Wiggle uses Oracle to support double-digit growth
[1] https://blogs.oracle.com/retail/post/online-sports-retailer-wiggle-uses-oracle-to-support-double-digit-growth
Let me guess..
Oracle on Windows (worst of both worlds)?
My apologies for swearing :)