Billionaire Mike Ashley has announced a deal to buy Evans Cycles which will see half of the bike chain’s stores close, resulting in hundreds of job losses.
The struggling firm was placed into administration before being sold to Sports Direct International.
Mr Ashley, who founded Sports Direct, said: “In order to save the business, this is the only way believe we will be able to keep 50% of stores open in the future.”
Evans, which is nearly 100 years old, has 62 stores and employs 1,300 people.
It emerged last month that the retailer was attempting a rescue deal, with accountancy firm PwC brought in as advisers.
Matt Callaghan, joint administrator and a partner at PwC, said it had been a very difficult year for Evans following the cold snap at the start of 2018 and a lack of cash to invest in stores and online.
“A combination of loss, the capital expenditure the needs and stiffening credit contribute to a liquidity crunch, ” he said.
Evans is the second retailer that Mr Ashley’s firm has rescued in as many months. In August, Sports Direct paid PS90m to buy House of Fraser shortly after the department store chain entered administration.
James Keany at commercial property firm CBRE, which is advising Sports Direct on Evan Cycles, 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.”
On your bike: almost a century of cycling
Cyclist Frederick Evans opened a shop – FW Evans Cycles – on Kennington Road in south London in 1921 He died in a road accident in 1944 The business was acquired by Joseph Smith in the 1950 s and sold motorcycles as well as toys. His son Gary took over some 20 years later and returned it to a specialist cycling outlet and oversaw its expansion Active Private Equity bought a controlling stake in the company for about PS35m in 2008 In 2015 Evans was sold to private equity firm ECI Partners in a deal valuing it at about PS75m