Evans Cycles

My brother in law works in the finance sector. He warned me things were not good for Evans at the beginning of this week. It appears cycling related businesses are really struggling right now.

The problem from what going on while I was there wasn't the market being the issues, it's simply poor management, training, staff treatment etc. which result in this.

https://www.bbc.co.uk/news/business-4559­5144

I expected something like this to happen sooner or later. Local shops are really struggling (as dancing james said), so it was clear that Evans would, too. It doesn't sound terminal (yet), but they'll probably have to close quite a few shops.

but they'll probably have to close quite a few shops.

In article;

"However, it is not thought to be considering a company voluntary arrangement (CVA) - a form of rescue deal that would allow it to shut stores and slash rents without going bust."

I hope not. I still wouldn't trust hearsay, though.

They'll probably have to make some cuts. Perhaps through some sort of cycle surgery. What do you think Oliver? Would you say that? I think you would.

Heehee

Well, as soon as they start it might become a bit of a chain reaction.

Damn. I knew I'd left you some wiggle room.

Are you guys just high on bikes?

Boom and bust has happened over the years in Brixton, cycles of ups and downs in this industry are to be expected.

What's in a name? That which we call a rose by any other word would smell as sweet.

Hah, increased in minimum wages my arse.

2 Attachments

I believe timberland high street stores are suffering !

That's a bit shitty to say. It is people's jobs, and I'd also rather have more bike shops as would many other people.

They have a lot of expensive retail units around country, doesn't take many slightly quiet months for that to gang up on you. I know some folks in local Evans stores and said it's just been slightly quiet but not unusually so.

Don't think they are in dire straights, just maybe worse quarter than they were expecting. A few stores might get shed.

Mostly from a bike person point of view, some staff are excellent, but most are really quite useless, and from folk I known work for Evans they do not treat them well at all.

It’s directed at the company. They’ve done massive harm to LBS’s everywhere. Most Evans staff are students and part-timers on zero-hours minimum wage shit and aren’t bike aficionados anyway. They’ll work anywhere in retail, from Sports Direct to Wetherspoons. Sorry if that sounds harsh but it’s fact.

When you’ve dug yourself into a hole, it’s usually best to put the spade down and walk away.

They’ve done massive harm to LBS’s everywhere.

Wait. What?

Are you new to the internets?

Private equity usually acquire such companies via a leveraged buy out and depending on the equity of the sponsor the debt is usually high yield or PIK Notes with interest between 6 to 15% per annum.

They'll try to extract value via cost cutting, sales push, or reposition the product via high marketing.

Not all succeed, as the high debt service means they might not meet their covenants or payment schedule if there's a bad quarter or two.

This is where the equity injection comes in but I guess the sponsor is reluctant to pump any more cash hence the lender's reluctance to extend their credit.

Either they stump up the cash, get a buyer or if both fails and in the extreme scenario, the lenders can enforce and seize the business.

I always found Evans really good for what it is. Not to belittle the stores, but I perceived them as the supermarkets of the bike world, the Tesco's or Sainsbury's, where they sell a little bit of everything but you shouldn't expect them to replace a dedicated butchers, bakers or candle stick makers. It's just not what they're set up to do. Like Halfords, they have a place in the market, but it's probably not for many people on this forum.

I've always had great service for what I've asked for, with the caveat that I didn't have super expectations anyway, but they most often delivered. Staff are helpful and friendly and often happy to go a little extra when needed.

Thanks for the advice. Let me know when you’ve run your own LBS for over 20 years and you can lecture me.

They’re in the shit and to try and get out of it, one of the deals was to buy in a load of 2019 Cannondales and are now selling them for less than cost. That’s hundreds of quids less than any LBS can even buy them on trade plus. Trade forums are up in arms about them, esp as LBS’s are closing up and down the country.

And yeah, I know it’s shit. I’m old enough to have known the original FW Evans in The Cut, and an ex-employee made his way up the ranks to the top, only to be sacked when the new investors took over and gave his job to one of his sons. It’s business, but I don’t have to like it.

I’m old enough to have known the original FW Evans in The Cut

Me too, and it was shit back then.