Evans Cycles pedalled hard for a decade, and yet at no point did its expansion ever suggest that it could become significantly profitable.

Reasons for the Evans Cycles pre-pack sale?

The failure of owners ECI to hold on to the slim operating margins it was previously making pushed it into a pre-pack sale to Sports Direct for just £8m earlier this week.

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Despite its promise, and its long-term revenue growth, significant profits always eluded Evans. It is therefore quite staggering that Active Private Equity managed to sell the business to ECI for £100m just over three years ago.

Since 2006 it quadrupled its top line, and yet never managed to scale up profits, with its best performance in 2014 when it made an operating profit of just £4.4m, precipitating Active’s canny sale of the business to ECI.

Evans operating profit

Source: GlobalData

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Its last two years of accounts filed at Companies House show an operating loss, as it struggled to compete with Wiggle and Halfords.

Bearing in mind that Evans’ last accounts filed at Companies House showed that it was carrying finished stock worth £28.2m, this would seem to be one of Mike Ashley’s least risky retail gambles.

Sports Direct has already indicated that half of its 62 stores will have to close, and it will be negotiating just as hard with Evans’ landlords as it has with House of Fraser’s.