Not The Chain Reaction They’d Planned

 We love to patronize our favorite local bike shop.  But I—and I am sure many of you—have bought stuff from an online retailer (or their predecessors—mail-order catalogues—remember those?) oh, once or twice.

One of the local dealers I patronized (until it wasn’t so local for me anymore) said he couldn’t blame people for buying parts from Performance or Bike Nashbar.  “Their prices are better than what I can get from my distributor,” he lamented.

Performance and Nashbar are in the tire tracks of history.  Now,’it seems, two more recent giants the online bike business may join them.

In 2016, Chain Reaction Cycles, based in Belfast, Northern Ireland and Wiggle, in Portsmouth in England’s south coast, merged. At the time, to join two companies that were already offering good deals on in-demand bikes, parts and related items into one that would have even greater buying power and would therefore offer even better deals to customers.

But another event that same year would contribute to the company’s current situation: the vote to secede from the European Union, a.k.a. Brexit. (Scotland voted to stay.) The “divorce” was finalized, if you will, at 23:00 GMT on 31 January 2020.

One effect has been higher tariffs, not only on imports to, but also exports from, the UK.  The latter included, in the years before the “breakup,” many orders from outside the country.  They included customers from EU countries—and, on a few occasions, yours truly.   American customers didn’t have to pay the Value Added Tax.  So, when the exchange rate was favorable to the dollar, I purchases not only Brooks saddles, but also French Mavic rims and Velox rim taped, Swiss DT spokes, German Continental tires and even Japanese Shimano cassettes for considerably less than I could have bought them Stateside.

The UK-EU split came early in the COVID pandemic. So, some of the losses Wiggle-CRC incurred from prices increasing for European customers were offset by the COVID bike boom.  That “boom,” however, seems to be going bust.  At least, people aren’t buying as many bikes and parts as they were three years ago.

According to industry insiders, Wiggle/CRC’s parents company, Sigma Sports United is “re-structuring” —which includes, among other things, ending its relationships with “underperforming assets” like Wiggle/CRC—and therefore de-listing from the New York Stock Exchange.  Those same insiders are saying that Wiggle-CRC has stopped paying its suppliers and intends to file for insolvency.

From what I’ve been reading and hearing, they’re not the only ones who have “buyer’s remorse” over Brexit.

It's All Your Fault (If You Voted A Certain Way)

A proprietor loses his businesses.  He points his finger. "It's all your fault!" he bellows.

In this case, though, he wasn't pointing to an executive, employee, family member or incompetent (or crooked) lawyer, accountant or bookkeeper.  Rather, he aimed his accusation at 25 million or so people.

What did they have to do with the demise of his enterprise?  (That rhyme was unintentional. Really!)  They all voted for what, according to the proprietor, was the slit to the throat of his company.

Hint:  They voted seven years ago, in the UK.

I am referring, of course to "Brexit:"  the decision to take the country out of the European Union (formerly called the "Common Market).  That meant the re-imposition of tariffs that membership eliminated on goods from most continental European countries.  Perhaps more to the point, it meant reels and reels of "red tape" that tied up shipments in ports and terminals or made it all but impossible to pass through.  It even made Brooks saddles unavailable England, where they have been made for more than a century and a half:  For about two decades, an Italian company has owned Brooks, so the company's saddles are shipped from a distribution center Italy, an EU country.

And many bike brands sold in the UK are based in European countries, even if the bikes or parts are made in Asia or other parts of the world.  One of those bike brands is Austrian KTM, distributed by Huddersfield-based FLi Distributors for the past eleven years.  They have just ceased trading. In announcing their demise, owner Colin Williams said, "If you voted for Brexit, realise (British spelling) this is 90 percent because of your decision back in 2016."

FLi is not the only bicycle-related company to close its doors since Brexit-related regulations took effect at the beginning of 2021--just as the worst of COVID-19 related shutdowns were choking supply chains.  I would bet that the owners and employees of those companies and Williams--along with many others in the bike business, cyclists and other citizens--are not the only ones regretting the Brexit vote.

Could A Charity Ride Break Up Their Club?

 Imagine that you’re going to ride in another country. (You like this post so far, right?) You arrive at your destination, go to pick up your bike and…a customs officer says you have to pay hundreds or thousands of dollars or euros or pounds (or its equivalent) to be reunited with your wheels.

That is the nightmare scenario faced a Welsh club faced. They were on their way to do a charity ride in Spain that had been postponed by COVID.

The Tap It Out Cycling club had raised more than 16000 GBP for Prostate Cymru. Perhaps not surprisingly, some members have prostate cancer, so the ride was a personal quest.

Some of the riders flew to Spain and sent their bikes ahead of them, by ferry.  When they went to pick up their bikes, border police told them they had to pay an 8500€ (7300£) tariff. 

Since Brexit, goods from Wales, which is part of the United Kingdom, have been subject to import fees.  The Spanish customs officials were not willing to consider the riders’ appeal that they were not “importing “ the bikes.  “It never entered our minds that we were going to sell bikes or be accused of selling bikes,” said group leader Nicky Morgan.

Nicky Morgan

He went on to relate that the club raised money from the club’s coffers to pay for the bikes and commence their ride. But, unless they win their appeal and get their money back, they will have to “fold the club, shut it down,” according to Morgan.

You Can't Sell Snow To The Eskimos Or Buy This In England

 Last week, the United Kingdom's "divorce" from the European Union, commonly called "Brexit," took effect.  Not surprisingly, this has affected the country's bicycle business--though, in some instances, in unintended ways.

Anyone who has ever reported on business and finance will tell you, "The markets don't like uncertainty."  The stock exchanges, whether in New York or London or Tokyo, usually fall when traders don't know who will be in offices or what policies will or won't be in place.  And businesspeople don't like to make investments when a change in a law could adversely affect them.

So it's no surprise that, for the time being, Canyon, based in Germany, stopped shipping bikes to the UK on 19 December.  A message on the company's website says that this stoppage will continue at least until Monday the 11th and is a result of "changes in tariffs and logistics in clearing points of entry into the UK."  

In other words, Canyon wants more clarity--more certainty--about the UK's new policies on imports from the EU.   So does Campagnolo, which has suspended all deliveries to the UK as the Italian component and wheel maker is "awaiting for EU dispositions in regards to the Brexit situation."

Now, it makes sense that because Italy is part of the EU, Campagnolo would want more certainty about Brexit-induced shipping and tariff regulations before sending its derailleurs and brakes to Derby or Birmingham.  But an Italian wish for clarity about policies is also delaying or halting deliveries of at least one British company's products--including what might be the most iconic English bike part of all.

Brooks leather saddles, including the B-17, Professional and Swift, are still made in England.  They are, however, shipped to a distribution center in Italy--where Brooks' parent company, Selle Royal, is based.  (SR purchased Brooks in 2002.)  From there, orders are shipped worldwide--including to UK customers.

You can buy this--as long as you don't want it delivered to you in England!

That is, at least, how things work in normal (whatever that means anymore) times.  But for the time being, "ongoing changes in the Brexit situation have made it necessary to suspend all new orders from brooksengland.com to the UK."  The company's website doesn't give a timeline as to when shipments to UK customers might resume.

Backpedaling on Brexit?

Today is Day 1 of Brexit.

In this post--or this blog--I want neither to endorse nor denigrate the move.  I can understand why some people wanted it.  On the other hand, it's hard not to think that it will ultimately hurt the country in some of the same ways the trade war with China is harming the US.  Also, a good chunk of the British economy is fueled by London's financial industry, which owes much of its strength as a "bridge" between America and Europe and, to some extent, Asia.

As a writer and lover of the arts, I also have to wonder how London's and England's cultural communities will be affected:  At least some of its vibrancy has to do with its diversity, facilitated by the free flow between the island and the continent--as well as other continents.

Anyway, I got a kick out of this: