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Halfords puts brakes on rescue bid for Evans Cycles

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Halfords has pulled out of talks to rescue Evans Cycles, paving the way for the Sports Direct tycoon Mike Ashley or another investor to take control of the struggling chain.

Sky News understands that Halfords, the UK’s biggest bikes retailer, ended discussions with Evans’ advisers in the last few days, having tabled an offer for the business last month.

Sources said that Halfords had decided to focus on Cycle Republic and Tredz, its existing premium brands, rather than pursuing Evans.

The decision casts doubt over the future of Evans, which needs to secure millions of pounds of new funding to secure its future.

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

Sports Direct founder Mike Ashley
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Sports Direct boss Mike Ashley has already ridden to the rescue of House of Fraser this year

Any takeover of Evans is likely to value it at between £10m and £20m, they added.

Halfords said in September that it wanted to at least double the number of its premium cycling stores, as well as investing further in its online presence.

The company said last week that Brompton Bikes, a leading brand, will be available for the first time in Cycle Republic, Tredz and Halfords stores.

The uncertainty over the future of Evans, which was founded nearly a century ago, underlines the risk of another prominent retailer being consigned to the list of names which have been plunged into crisis this year amid a toxic high street trading environment.

Like many chains, Evans has slipped into the red because of a combination of rising costs and challenging trading conditions.

It‎ trades from just over 60 stores across the UK and traces its history to 1921, when the first FW Evans Cycles shop opened in southeast London.

The company, which is owned by the private equity firm ECI Partners, is being advised by PricewaterhouseCoopers (PwC).

Halfords is the latest firm to take a hit from the falling pound
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Halfords is the biggest competitor of Evans

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 involving its lenders is not the first time 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.

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