Mike Ashley’s plans to shut half of Evans Cycles’ stores, leading to hundreds of job losses, came despite the administrator reportedly advising him that they were “almost all” profitable.
According to The Telegraph, the Sports Direct owner – who purchased Evans Cycles out of administration for £8 million last month – was informed by the administrator PwC that nearly every store was profitable but the fixed costs at the head office were a “burden”.
Almost immediately after Evans Cycles was rescued from administration, Ashley announced that 31 of its 62 stores would have to close “in order to save the business”, potentially leading to around 400 job losses.
It is also understood that Evans Cycles’ unsecured creditors, which are owed a collective £24 million and include six-time Olympic champion Chris Hoy, will receive as little a 2.4p on the pound back of what they’re owed.
Sports Direct recently acquired House of Fraser through a similar pre-pack administration process, which has also left many unsecured creditors owed tens of millions to expect as little as 2p back on every pound they’re owed.