Evans In Bank Talks As Cycle Market Turns

A slowdown in bicycle sales has prompted one of the industry’s biggest retailers to kick off talks with its lenders about an overhaul of its financing arrangements.

Sky News understands that Evans Cycles, which is owned by the private equity firm ECI Partners, is in discussions with banks about a revamped financing structure.

The move has been prompted by the brakes being applied to the UK bicycle market, with market-leaders such as Halfords reporting in recent weeks that like-for-like bike sales declining by 4% in the 13 weeks to July 1.

Evans was bought by ECI from Active Private Equity, another buyout firm, for an undisclosed sum just over a year ago.

It trades from more than 60 stores around the country, and hailed its sale last year as "an exciting new phase in our journey".

However, persistent wet weather has compounded a softening of the market, which saw explosive growth in the period after the London Olympics held in 2012.

Earlier this year, Wiggle, the online bike retailer, acquired Chain Reaction, a Northern Ireland-based competitor, in what analysts interpreted as a defensive move against the market downturn.

A source close to Evans said the company was trading ahead of the market, and expressed confidence that it would outperform rivals in the medium term because of its high street presence and investment in online operations.

Halfords is the largest listed player in the sector, and has seen its shares slump by nearly 40% during the last 12 months as trading has slowed.

Sources dismissed suggestions in the market that Evans was "in trouble", but both the retailer and its majority shareholder declined to comment on the details of its discussions with its lenders (Other OTC: UBGXF - news) .