Sports Direct International has acquired Evans Cycles, which formally went into administration this week. It has been reported in a number of media outlets, including the BBC and The Guardian, that Sports Direct may close around half of its 62 stores. This puts around 440 jobs at risk.
In a statement, the billionaire founder of Sports Direct, Mike Ashley said, “In order to save the business, we only believe we will be able to keep 50% of stores open in the future.”
Approaching its 100 year anniversary, Evans Cycles was founded in 1921 in South East London. It employs around 1,300 people.
ECI Partners, the private equity firm behind Evans has sought to sell ‘the UK’s largest bricks-and-mortar specialist bike retailer.’ Rival bidders had included Halfords and JD Sports. Although, Sports Direct ultimately closed the acquisition.
Sports Direct has been notably acquisitive as UK high street retail has struggled recently. In September, it bought out struggling national department store chain, House of Fraser after it had also entered administration.
Within the endurance sport retail space, Sports Direct made a below-the-radar acquisition of TRI UK in October 2017. TRI UK opened its new Shirebrook superstore in Derbyshire earlier this month.
The BBC quoted accountancy and corporate recovery firm PwC, which had been brought in by Evans as advisers. Matt Callaghan, joint administrator and a partner at PwC, reportedly said that it had been a very difficult year for Evans. This followed the cold snap in the UK at the start of 2018 and a lack of cash to invest in stores and online.
“A combination of losses, the capital expenditure requirements and tightening credit has led to a liquidity crunch,” he said.