Opening a new shop.

Bike shops don't make money look at Cycle Repubic/ Halfords if they can't make it work who can ?

Cycle Republic was doing well, it's the fact that Tredz (also owned by Halfords) make them more money than Cycle Republic simply due to the lack of brick and mortar to maintain, so they decide to just close Cycle Republic and keep investing in Tredz to sell bicycles, while Halfords have a much diminished workshop for the bare necessity of servicing bicycles.

Selling bicycles make more money than servicing bicycles*.

It didn't end well, as customers from Tredz (and Halfords, even Evans Cycles) often come to Cycle Republic for servicing.

*as mentioned earlier, while selling bikes net a bigger profit, it's very much dependent on the market, whether servicing bicycles will always remain consistent as long the workshop is up to dates and maintain quality of workmanship.

I do think there's lots of room for LMNH style venues.

Could well be wrong but my understanding of that business is that it was started by three people. One with an understanding of bikes, one with an understanding of Cafe's and one with an understanding of business. Without one of them you could argue that it wouldn't of worked.

To the OP, (and apologies if this is a dumb thought) is sharing the space viable? Potential to reduce overheads and increase footfall? A cafe can work (pre covid) but it's tough and you need someone that knows what they're doing.

One thing COVID has show us is with sufficient demand the traditional bike shop model works as it should - I've not had to sell a single bike at a discount over the last year, so we made a much better margin, and as wiggle et al have ran out of stock that's meant less competition (No 50% off RRP shimano groupsets floating around online anymore) chuck in Brexit making it harder to get cheap stuff from Europe which will only continue. Our on-site cafe's been closed most of the year due to covid and reduced footfall in the area making takeways non-viable