Evans Cycles is about to undergo its first wave of store closures under new parent company Sports Direct, after the latter bought the cycling retailer out of administration in October.
Evans Cycles stores in Braehead, Brentford, Durham, Fulham, Holborn and Kendal are facing the chop, the first batch to close amid Sports Direct’s plans to shut down around 31 stores.
When the Mike Ashley-owned firm bought Evans Cycles out of administration for £8 million, a turnaround plan for the chain was revealed, which would see half of its 62 stores remain open.
It is not yet known how many staff members will be affected by the closures, although the 62 sites employ around 1300 people.
“We hope landlords will be reasonable and support our turnaround plan, now that we have stability due to backing from Sports Direct,” Evans Cycles chief executive Steve Trowbridge said.
“However, we must remain competitive, and sadly we are now in consultation with staff at these stores.”
Evans Cycles revealed it had hit financial difficulties in September, holding talks with lenders to seek an urgent capital injection.
It was the culmination of a difficult year in which extended winter weather hurt trading and a lack of cashflow prevented investment.
However, according to The Telegraph, at the time of his acquisition of Evans Cycles, Ashley was informed by administrator PwC that nearly every store was profitable – although the fixed costs at the head office were a “burden”.
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 as 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.