Bargain UK sports retailer Sports Direct has announced the purchase of Evans Cycles, in a move that saves the company from administration but could see as many of half of its UK stores close, putting hundreds of jobs on the line.
Following financial issues, the company found itself on the hunt for an immediate £10m cash injection and new ownership to save it from administration.
Potential buyers considered bids for the high street chain, including the likes of Halfords and JD Sports, but it was Sports Direct, owned by controversial businessman Mike Ashley that managed to secure the sale.
It will come as part of a pre-pack administration sale that allows the sale of an insolvent business before administrators are sent to the business. Ashley has commented on the purchase and the future of the business.
'We are pleased to have rescued the Evans Cycles brand,' he said. 'However, in order to save the business, we only believe we will be able to keep 50% of stores open in the future. Unfortunately, some stores will have to close.
'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,' Ashley added.
While in the short term this saves Evans Cycles as a brand, concerns will likely now turn to the exact number of stores that will close and what this means to current employees.
Evans currently runs 60 branches across the UK which accounts for over 1,000 employees. Since doors to its first store opened in 1921, Evans Cycles has secured its place as the dominant bike shop on the high street but has struggled with the market shift to online shopping.
It also runs a head office in Crawley and owns house brands such as FWE and Pinnacle, while also being the UK distributor for BMC bikes.
Evans Cycles is the latest purchase for Ashley who also bought House of Fraser out of administration in August for £90m. This added to his existing ownership of Sports Direct and Newcastle Football Club.
Ashley has been routinely criticised in the past for his treatment of staff, most notably his use of zero hour contracts.