Most Evans Cycles stores profitable, despite plan to close half
New information surrounding the Evans Cycles buyout has emerged with news that few of the company’s stores were loss-making when it went into administration.
New owner Sports Direct has said it would need to close around half of the chain’s stores but it appears that the biggest issue for the business is its head office costs rather than unviable shops.
The company, which is nearly 100 years old and sells cycling equipment as well as clothing and accessories, went under despite having 62 stores that were largely trading profitably before the buyout by the Mike Ashley-led retail giant last month.
The company paid only £8 million for the business in a pre-pack administration and its statement that it needed to close around 50% of the stores left the 1,300 people the business employs uncertain for their futures.
Documents prepared by PricewaterhouseCoopers said that “almost all the stores were profitable” but the fixed costs at the firm’s Surrey HQ were a major “burden”.
And as well as those fixed costs, the company, which had been owned since 2015 by ECI Partners, owed £85 million to secured creditors, another factor that would have undermined its survival chances.
It’s unclear when any of the stores will close and even if Sports Direct will go on with its original plan to close around 30 of them. Its experience with another administration purchase, House of Fraser, has showed that its store plans can be derailed by any number of factors and may need to be changed as the situation develops.
For now, all of the Evans stores continue to be listed on its website and no news has emerged of any closures so far.
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