Mike Ashley, the owner of Sports Direct, is set to shut down a number of the existing stores of Evans Cycles in spite of the recent suggestions that most of the outlets of the chain were able to report a profit.
The retail magnate has released a warning that he might only be able to keep half of the stores of Evans Cycles open in the future “in order to save the business.”
However, a proposals document of an administrator that was disclosed by The Telegraph during the weekend discovered that PricewaterhouseCoopers (PwC), a Big Four accountancy firm, decided that “almost all the stores were profitable,” however, the company was still “burdened” by fixed costs at its head office.
Last month, Sports Direct issued a stark warning that it may have to close down half of the 62 stores of the chain. The said move will be possibly putting more than 400 jobs at risk.
The decision of Ashley to save the ailing chain ended speculation that Halfords, its rival, was set to swoop in for the specialist retailer, came after the management team of the firm declared that £20 million was required as part of a turnaround plan.
Cycle Evans is one of the several acquisitions that was made by billionaire Ashley during his most recent acquisition spree.
In August, Ashley also added House of Fraser to his retail empire. He vowed to eventually transform the beleaguered high street chain into the “Harrods of the high street.”
The rescue bids of the tycoon come amid the persistent high street woes, that was driven by stiffer competition and higher costs, which have seen a number of retail giants recently file for administration.
PwC refused to comment on the matter and Sports Direct could not be reached to issue a comment regarding the same.