Halfords back-pedals on Evans Cycles rescue

Redditch headquartered bicycles-to-car parts retailer Halfords has ended talks over a potential rescue deal for struggling rival Evans Cycles.

Halfords, which is listed on the London stock market and is the UK’s biggest bikes retailer, was among a number of parties which tabled indicative offers for Evans last month.

Sky News sources say that Halfords had decided to focus on Cycle Republic and Tredz, its existing premium brands, rather than pursuing Evans.

Sports Direct International, run by Mike Ashley, is now regarded by industry insiders as the new frontrunner to acquire Evans, although they cautioned that it was unclear whether a deal would be agreed.

Other bidders tabling offers for the chain last month included turnaround investors, with Evans requiring more than £10m in fresh capital to see it through the next few months of trading.

Evans has slipped into the red due to a combination of rising costs and challenging trading conditions.

The chain trades from just over 60 stores across the UK and traces its history to 1921, when the first FW Evans Cycles shop opened in south-east London.

The company, which is owned by the private equity firm ECI Partners, is being advised by PwC while AlixPartners is advising the retailer’s lenders.

It has been backed by a number of investment firms, including Active Private Equity, which sold it to ECi in 2015 for an undisclosed sum.