Evans Cycles sold to Mike Ashley’s Sports Direct as part of pre-pack administration

More than half of the cycling stores will be shut, Sports Direct founder said, which will put hundreds of jobs at risk

UK retailer Evans Cycles has been sold to Sports Direct as part of a pre-pack administration, and as many as half of its UK stores are set to close, putting hundreds of jobs at risk.

The cycling chain has 60 branches across the UK, and employs more than 1,000 people.

In 2015, Evans was sold to private equity firm ECI Partners for £75m, however in recent months it has been scrambling to find new ownership and a £10m cash injection.

A pre-pack administration process allows the sale of an insolvent business before administrators have been appointed.

Evans was previously reported to be fielding offers from rival Halfords, JD Sports, and a number of others, but Mike Ashley won out. No purchase price has been disclosed.

Mr Ashley said: "We are pleased to have rescued the Evans Cycles brand. However, in order to save the business we only believe we will be able to keep 50 per cent of stores open in the future. Unfortunately some stores will have to close.”

Matt Callaghan, PwC partner and joint administrator for Evans, said: “2018 has been a very difficult trading year for the business, in part due to the impact of the extended winter weather in the early part of the year and a lack of cash to invest in stores and develop the online platform.

“A combination of losses, the capital expenditure requirements and tightening credit has led to a liquidity crunch.”

He added: “Evans is a long-standing, well known and trusted brand with nearly 100 years of heritage in the cycling market. To have managed to preserve the business and transfer all staff to the purchaser is particularly pleasing.”

James Keany at CBRE has been retained on all property related aspects, Sports Direct said.

Mr Keany said: "We are looking forward to working with landlords in order to help create a sustainable business. We will make contact with landlords over the next few days and discuss the future of individual stores."

Mr Ashley has been adding to his retail empire recently, buying House of Fraser out of administration for £90m in August.

He has managed to save a number of House of Fraser stores previously earmarked for closure, but has apparently clashed with landlords at other locations.

A spokesperson for House of Fraser said recently: “Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs.

“However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people.

“We will continue to try and convince these landlords but ultimately time is running out. Some closures will be announced.”