Sigma Sports
Sigma Sports is the UK’s leading premium omni-channel retailer of cycling equipment, with an e-commerce platform selling into territories across the globe and destination stores in Hampton Wick and Oakham, Leicestershire.
Background
Sigma Sports was founded in 1992 by Ian Whittingham and fellow cycling enthusiast Jason Turner, who began by sourcing products from Belgian wholesalers and selling them via mail order from Ian’s bedroom, before moving to a store in South West London. Sigma’s heritage is in the enthusiast, road cycling segment of the market and the business generates high repeat purchase rates and market leading levels of high value customer spend. The business has preferred relationships with the key premium global cycling brands, with brands viewing Sigma as a key channel to market.
In 2010, Corry Taylor (a brand builder with a track record of acquiring and internationalising brands, such as Icebreaker, Schoeffel and Le Chameau) invested in the business, allowing Sigma to buy its Hampton Wick flagship store, in addition to opening a new distribution centre in Grantham. Since then, the business has significantly grown its e-commerce business, with Sigma Sports’ revenues now predominantly coming from online sales. Primary was introduced to the management team at Sigma Sports in 2020 when existing shareholders and management were seeking an equity partner to help them grow the business through its next stage of development.
The Big Idea
Sigma Sports occupies a niche leadership position in the fast growing £2.6bn cycling market, which has favourable customer dynamics underpinned by macro drivers such as increased interest in health and fitness (in particular post Covid-19), favourable governmental policy (investment in cycling infrastructure and subsidies for bicycles) and continued new product development: eBikes, gravel bikes and innovations such as Zwift are driving volume and price growth. The continued shift online, movement away from traditional players and continued consolidation by brands who are focusing on fewer, better retail partners means that Sigma benefits from an attractive market backdrop. Sigma Sports is uniquely well-placed to benefit, given its premium customer base with high levels of repeat custom, preferential relationships with key premium cycling brands, and market leading e-commerce platform.
The Grand Plan
Strong market growth and Sigma Sports’ differentiated proposition offers an opportunity for the business to continue its impressive growth story, accelerated through further investment in its e-commerce platform. Despite the business having focused on the large UK opportunity to date, it already has an international sales profile which can also be further developed in selected territories. The fast growing eBike and gravel bike segments also allow the business scope for product expansion, in addition to broadening the range to include lower, though still premium, price points. Additionally, Sigma Sports has recently launched its own clothing brand, Universal Colours, following the success of its own parts & accessories brand VEL. Sigma Sports will also open a limited number of carefully selected additional destination stores.
The Bottom Line
Sigma Sports is a highly successful and well-regarded business, which has shown rapid growth in a fast growing global market. It is headed by a strong, longstanding management team with a passion for cycling which drives their desire to further develop the company. We intend to support the team to maintain its market leading position and continue to grow the business in both existing and new territories and product ranges.
Investment Summary
Date of Investment: February 2021
Deal status: Current
Company website: www.sigmasports.com
For more information talk to: Graham Heddle or David Richard
