Cycle retailer Evans in talks with lenders

By Mark Kleinman, City editor
The century-old retailer Evans Cycles is in talks with its lenders about an urgent capital injection following a slump in profits.
Sky News has learnt that the company, which is owned by the private equity firm ECI Partners, is working to secure millions of pounds in new funding.
Evans has hired PricewaterhouseCoopers (PwC) to advise it on the financial restructuring, while AlixPartners is understood to be advising AIB and HSBC, the retailer's principal lenders.Sources said on Friday that Evans needed at least €10m in the coming months, although it was unclear exactly how precarious a state its balance sheet is in.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.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.The current talks with its lenders are not the first times that Evans has flirted with financial difficulty.In 2016, it held similar talks with its banks amid a slowdown in bicycle sales.This year, it parted company with Andy King, its chief executive for less than two years, and replaced him on an interim basis with Alan Fort.
Evans competes with the likes of Halfords on the high street, and online rivals such as Wiggle.It is the latest in a long series of major retail names to be forced into talks with its lenders as the industry contends with one of the most brutal trading environments for decades.Chains such as House of Fraser, Mothercare, New Look‎ and Toys R Us UK have either been forced into administration or secured creditor approval for radical restructurings.Tens of thousands of jobs have been lost, with a number of Company Voluntary Arrangements (CVAs) sparking fury among landlords about the financial hardship being imposed on them.Bosses across the industry have urged the Government to prepare an urgent overhaul of the business rates system in order to alleviate part of their financial burden.
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Philip Hammond, the Chancellor, has ‎signalled the potential introduction of a new digital tax to level the playing field between digital and bricks-and-mortar retailers, although this idea has met a largely lukewarm response from the industry.An ECI spokesman declined to comment.
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