Talking about what he thought was a metaphorical ‘for sale’ sign hoisted over Evans Cycles, Retail Week columnist George MacDonald said:
"Despite some scepticism in the past few months about the outlook for private equity-backed retail deals, it seems there’s still plenty of appetite. Other than the obvious distress situations that have prompted interest, the hot properties seem to be niche retailers…According to banking sources, there are still piles of cash available to be pumped into the right acquisitions."
Tonight’s Evening Standard has also carried a story about the outright sales of Evans Cycles.
In a bid to "accelerate expansion", Evans Cycles is "investigating potential partners," said MD Mike Rice, pictured.
Retail Week took this to mean the whole business is up for sale but chairman Gary Smith – who, along with his son, owns the majority of shares in Evans Cycles – told BikeBiz the media reports about an outright sale were wrong.
"We’re always being approached by people who want to buy us. We’re definitely not for sale. We are, however, interested in taking on an equity partner to fund expansion."
For the year to October 2005, Evans Cycles had sales of £25.2m with an operating profit of £973,555.The company is currently 11 per cent ahead of its sales target and profits are up too. The company is projecting sales of £45m for 2007.
In September last year Evans Cycles created a house-brand bicycle – Pinnacle – and has been opening new stores on a regular basis. Six were opened in 2006.
Three new outlets will open soon. The first store opening is in Chiswick, West London, later this month, planned to coincide with the introduction of the Congestion Zone westwards. A new store in Hendon will open in May. And shopfitters are currently fitting out an Evans Cycles store due to open in Nottingham.
Talks with prospective equity partners start next week. Ten companies are in the running. A deal could be signed by April.
“We are looking at investors outside cycling and with a proven track-record in developing retail businesses," said Rice.