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He'll most likely screw it all up with the suppliers and customers as he has with House of Fraser. They're a biggish customer of mine and it's gone from us making daily deliveries and collections for every brand they stocked at their huge amount of concessions to brands pulling out completely as soon as he decided to not honour gift vouchers and wriggle out of paying for stock that had already been delivered and in some cases sold! Now we're lucky to go there tree times a week and the amount of brands that have pulled out of there is rather shocking. The staff already hate his guts as he's trying to cut back on their conditions and perks with immediate effect. Footfall is down by a large percentage too, nor a good thing as we approach the Christmas rush.
Administration. Have they done that just to avoid honouring gift vouchers etc, or does it let them close stores more easily?
Close unwanted stores more easily I believe. They can cut free stores they don't want without long term lease agreement "get out" costs and maybe staff redundancy costs, staff are covered by gov basic redundancy payouts
Forget Pinnacle, they’ll be Lonsdale bikes now
From the reviews you'd wonder if this is the same Lonsdale 🙂
Does anyone have any idea what this means for bikes on order? Bought and paid for a bike for my daughter due for delivery on Friday? Will she see it or should I be contacting the credit card company?
Really should have paid more attention to the comments on this thread over the last couple of weeks. The wisdom of STW - it pays to listen!
For bikes on order it's up to you and them whether the new company will want to honour your order or not. Ask.
Although the Evans website still claims to be trading as FW Evans Ltd, which is very naughty and could get PWC into trouble.
Difficult to say what the fallout will be for outstanding individual orders. Pre pack administration "that avoids administrators" is unknown territory for me re the detail. Depends on deals done with suppliers. Unpaid stock will perhaps go into Retention Of Title lock down until negotiated and released, could take months. Probably will depend on whether you ordered from a close down store or saved store whether you get bike/money back or sweet FA from administrators. If you paid on credit card you're probably ok re the money (not something I know about, but seems to be the general mantra on here).
It was always going to be a pre-packaged administration I think. 'Rescue Plan' and Sale are not two words that go together otherwise. Unfortunately the company was a basket case with debts massively outstripping its assets (as per 2017 accounts) so as I understand it was trading as technically insolvent for a long while now. You can only do that so long before you start to run into issues where your decisions can be construed as fraudulent if you start signing agreements (for credit etc.) where you know you're technically insolvent and have no realistic means to get out of that or service those debts.
Im surprised MA bought it, I thought it would have a shot with a JD or even a private buyer. It doesn't seem a good fit for his style of business, but whatever happens now, I think as a bike seller myself, there are quite a lot of companies up and down the country that woke up a little happier this morning. For the independent LBS market there's pretty much no better outcome as Evans will now challenge Go Outdoors, Halfords & Decathlon's low end product, something they (Evans) have traditionally ignored and a space its very difficult for the indys to compete in.
The downside for some of course is that popping in and out of administration means you can ditch your unsecured debts. Thats likely to mean some suppliers (although most would have ownership of stock, but thats a wrangle in itself), but mainly customers, staff and other individuals that interact with the company. The debts that sank the business would be secured, but a proportion would have to have been written off to make the sale happen.
Ewww. Bought by sports direct.
Well, there’s me not spending any money in evans any more
Which, in reality, is bollocks.
In the grand scheme of things, virtually no one gives a **** about business ethics, witness the ubiquitous question asked regularly on here - where is 'the best' place to buy blah blah blah.
Which is actually the cheapest, as we all know. If the fat controller sells cheap tyres for gravel bikes, the fashionistas will Hoover them up.
The experience of House of Fraser customers who have lost their goods and their money should hopefully have prompted most of us to delay/cancel orders and get rid of vouchers.
A real shame for Evans staff and their suppliers.
Which is actually the cheapest, as we all know. If the fat controller sells cheap tyres for gravel bikes, the fashionistas will Hoover them up.
Well he needs to persuade somebody to sell him some first. Be interesting to see who wants to deal with him.
Yeah, despite being a multi billionaire, I bet hes not thought of that eh?....
If it wasn't for you pesky cyclists! 🤣
Well do you think the big brands will put stuff in shops if it turns to shit? I'd think they are playing nice until they get their cash out.
I bet he has thought of it, it's god. F all to do with cyclists etc. It's just about a brand he can use. For people like spec/trek they have a brand to maintain.
As a Rangers fan, I'm sure you'll know I have pretty good knowledge of how he operates, but business is business, if he makes it successful, and he usually does, then the brand's will work with him, bet yer last bottle of newcy brown on it.
Massive amounts of naivety on this thread! I don't have a view on Ashley much beyond the lack of corporate governance his company has, but he is demonstrably effective in what he does.
Why aren't the whingers on here decrying the venture capitalists who have driven Evans onto the rocks with excessive debt? Or the government and banks who have allowed it? And then stating they'll never bank with Barclays / whomever or shop with a plc who've used PWC as auditor?
Well he needs to persuade somebody to sell him some first. Be interesting to see who wants to deal with him.
Yep but Sports Direct have Puma King and Adidas Predator boots so it's not like the big brands are refusing to deal with him. However, I'm speaking from near ignorance on these things and maybe it's a grey import scheme.
At least we know what Evans next range of bikes will look like....
On a more serious, even more depressing note, is Mike Ashley pretty soon going to own just about every high street chain? I heard the BBC business correspondent gushing about him being a 'phenomenal businessman' blah, blah, blah.....
and as I listened to him going on I got that feeling of Deja vu. They were just repeating word-for-word what they were saying about the 'retail genius' Phillip Green, ten years ago
Yep but Sports Direct have Puma King and Adidas Predator boots so it’s not like the big brands are refusing to deal with him.
Yep but selling a pair of boots is a different league to a 3-5k bike, as I said above he is going to need the good staff to stay, especially the mechanics unless your going to be a click collect shed.
All I want to know is - can I still use my Tesco Clubcard points?
😆
They were just repeating word-for-word what they were saying about the ‘retail genius’ Phillip Green, ten years ago
Spot on binners
I feel sorry for the staff in my local store who are pretty good. It's close to work and tends to be my favoured spot for popping and getting bits and pieces when I don't want to faff around ordering online (or using click and collect). I bought a bike from them about 10 days ago and they did me a decent deal combining trade in/price match/BC discount and some free fitting of accessories and a couple of freebies (tubeless valves etc). I do have other options (Cycle Republic a similar distance away from work or Cycle Surgery a bit more of a walk away, and another couple of shops nearer home) and suspect I'll use those more in future particularly if the business model starts to change or the good staff leave.
Well he needs to persuade somebody to sell him some first. Be interesting to see who wants to deal with him.
Because canondale, bmc, pinnacle, cube, Scott have so many other options to penetrate the mass retail market
Yep but Sports Direct have Puma King and Adidas Predator boots so it’s not like the big brands are refusing to deal with him.
Its the reason he bought Newcastle. The big boys wouldn't deal with him directly (Sports Indirect?) so he hatched the idea that if he bought a premiership club - ANY premiership club - they'd have to take him seriously and supply him
Newcaste were just the Club that was unlucky enough to be in the frame at the time
By the sound of it, it was either this deal or Evans going properly under, Maplin-style. Had Halfords bought them, the outcome would be the same due to their existing high street footprint in Cycle Republic. I've thought for some time that there is no way that they can continue as they are, based on their huge overheads and the tiny margins in bike shop retail, so for me a "50% save" is probably as good as it was ever going to get.
I feel sorry for all of the staff, for whom this will be a very worrying time and hopefully at the end of it, a more sustainable business will emerge. Who knows, it might even be better than it is now, with SD selling some better quality kit through their existing stores.
Really hope their Ride-It events continue though, but I'm not placing any bets on this...
Thanks for the helpful info extra background all. Do feel for the staff and suppliers of Evans. It’s shocking that auditors are allowed to behave as they do - presuming Evans has effectively been insolvent for some time. The lack of trust generated by resorting to gray dealings by the owners or through the use of prepack administration is surely going to drive consumers away from the high street.
"going to need the good staff to stay, especially the mechanics"
If they are planning to close half the shops then that reduces the number of good people they'll need to recruit.
While it's good that some jobs/stores have been secured in the short term, it remains to be seen whether any of these retail 'rescues' are actually aimed at keeping the brand and stores running rather than ditching some liabilities, using them as a vehicle to get even more finance, which is then gutted alongside any assets before the inevitable collapse a few years down the line.
MA's willingness to trash HoF's reputation by stiffing customers and suppliers is not a good sign.
By the sound of it, it was either this deal or Evans going properly under, Maplin-style. Had Halfords bought them, the outcome would be the same due to their existing high street footprint in Cycle Republic. I’ve thought for some time that there is no way that they can continue as they are, based on their huge overheads and the tiny margins in bike shop retail, so for me a “50% save” is probably as good as it was ever going to get.
Yep - I'm no Ashley fan, but everyone saying it's immoral how a prepack administration works are wide of the mark. If a firm goes into administration proper, the accountants balance assets against debts, pay the preferential creditors first (so the taxman mainly) and then what's left is shared out. In a prepack the buyer, the debtors and the administrators do a deal over which bits are kept and which are shelved, and if any of the bike firms or distributors were owed a lot of money they may have had some sort of say/opinion in the final deal too - so might be better for them for New Evans to continue to trade on a reduced basis and they get something back, than if they'd just gone tits up and you then have to battle over getting your pennies in the pound or retention of title and so on. And of course, RoT is f'all use if you send a bike to Evans expecting payment 30 days later, if in the meantime that's been sold to a customer and the cash is just in the black hole pot of assets....... you can't go to the end customer and ask for it back!
I'm also slightly annoyed - a few pages back there were folks on here, who may or may not have been staffers, saying that warning people that all is not good at Evans was what was creating the issues for them. I said at the time i didn't think they were offering personal guarantees, and they may also have been sold the lies by management but
They’ve seen a drop in profits yes, but they’re not in the red. I think the news story gave an insight and now everyones minds have run wild and Chinese whispers has lead to “did you know Evans is going bust” which is quite laughable really. Its owners aren’t happy with the profits so they’re looking to sell it. Seems sensible. But I guess its wouldn’t be a typical forum without everyone getting stuck into a big drama and blowing everything out of proportion!
and
this kind of internet know it all attitude can genuinely affect a companies sales and in turn peoples jobs. I see some colleeague have jumped in to the thread, we made a profit last quarter and had a good summer and are doing pretty well compared to many high street chains. Chinese whispers is a pretty dangerous game.
I hope those that are owed goods / have vouchers get what they ordered, but based on HoF I wouldn't hold my breath. Hopefully the bigger ticket items will be on CC's and therefore you'll be covered in the end but still hassle and the pita factor of being without your money and your bikes while they're sorting it out. But that's not Ashley's fault or PWC's - sure it'd be nice if he honoured all the debts but that's what sent them to the wall in the first place, and all PWC do is look for a deal that is best overall.
all PWC do is look for a deal that is best overall.
Lols. Of course they don't!
Under the Insolvency Act, 1986, an administrator has specific duties and responsibilities to creditors, and in the first instance will take control of the company with a view to business rescue.
They have a duty to act in the best interests of creditors as a whole, and will attempt to realise the highest returns for all groups if rescue is not possible. If this also fails, they must attempt to achieve a better result for creditors than if the company had been liquidated.
An administrator adopts diverse roles and responsibilities during a formal insolvency procedure, as an officer of the court and an impartial agent/manager of the company, and has a duty to act with integrity and good faith.
"it’s immoral how a prepack administration works are wide of the mark."
It's immoral how this one's been done. Evans were trading whilst insolvent, knowingly selling vouchers and taking orders that they knew they wouldn't be able to fulfil. And are still falsely trading as Evans, right now.
MA’s willingness to trash HoF’s reputation by stiffing customers and suppliers is not a good sign.
Its a good sign that he wants to run the business, honouring those debts is what was crippling HoF and it was to be expected anyone buying anything would have done the same.
As for vouchers why after the last several years of companies going bust and offering nothing against vouchers anyone would have bought those is beyond me but, if you want to get angry against the immoral rather than the stupid, HoF and Evans could see this coming a long way off but continued to sell vouchers knowing at some point they'd be completely worthless and using the gullible public to effectively write unsecured loans to the business. If you want someone to blame for the worthless IOUs in people's wallets, blame the people who bought them first despite all the warnings and evidence it was a stupid thing to do, then blame the people who sold them, right to the end, knowing they were worthless. Don't blame the ones who happen to be trying to keep the thing at least twitching for a few more weeks.
That's not Ashley or even particularly PWC's fault*, they continued trading while expecting a £10M cash investment which would (supposedly) have made them solvent again (although for how long IDK, unless you fix the leak you can put as many buckets under the drip as you want but it won't stop)
* although iirc they got PWC in earlier to advise them before they became administrators formally so there may be a case to answer.
Continuing to trade as Evans - not sure on that, but there are lots of places that details need to be changed and I'll excuse missing a webpage if it is a genuine error.
I'm sure PWC will do quite nicely out of it, whatever happens. They always do.
Its a national scandal how the 'Big Four' have been allowed to carry on business-as-usual since the banking crisis. I think its probably safe to say it'll have been one of those lot who will have been signing off Evans previous accounts, which can't have looked too rosy. Companies don't get into this state overnight. The same as they signed off the Banks leading up to the crisis, BHS, etc, etc, etc....
It makes you wonder what you'd have to do before they actually flagged something up., instead of taking the cash and signing on the line that everything looks just peachy creamy
I don't disagree with that either....... but they are clever and I'm sure they'll have been the right side of the regulations while they took their fee.
It's a murky, yet highly regulated and organised process, if that's possible.
Better exchange my tesco vouchers then and buy something before they withdraw!
Better exchange my tesco vouchers then and buy something before they withdraw!
I'd (very much) guess they're a little different and Tesco promise to pay Evans ??p on the pound for each voucher, so risks of Evans pulling out of those is slim as it's another revenue stream. Tesco may pull out to avoid reputational damage i suppose but there's not much you could do as a business that would risk Tesco's rep that they don't already do much worse themselves so I'd be surprised by that.
(If anything I'd imagine tesco are fairly happy as they won't have paid any of the last 90-120days of voucher redemptions yet and now probably won't have to)
Jon - you're obviously very knowledgable on the subject. How do you think it is that the big four are allowed to continuously sign off the accounts for companies that fold, often with huge black holes in their accounts? They seem to do so with impunity, yet it happens time after time after time
"Because canondale, bmc, pinnacle, cube, Scott have so many other options to penetrate the mass retail market"
If they get pissed off by MA's practices at Evans they'll move over to a mix of LBS and smaller chains like Leisure Lakes to cover all the areas. Any bike company with any nous whatsoever will want to avoid going through the pain GT and Saracen went through 20-odd years ago when they agreed to make budget versions of popular models for Halfords. Even just having large amounts of older stock being massively reduced can do enough damage for a few years. That damage to the brand can be so hard to reverse they could leave the UK. As Ben said earlier, a lot of the independents and small chains will be waiting for the fallout so that they can hoover up the better staff, bike brands and customers.
MA and co are just the hyena's who tear into the corpse.
The whole system stinks and its proof (if anymore were needed) that capitalism is completely broken.
I really don't know that the SD model works for Evans, yes SD has the likes of Nike etc. in their stores (Even Zipp wheels) but with that type of product you can say to the manufacturer, make me a tracksuit with your logos at this price point and they'll go do it if you're willing to buy 10,000 of them. Or you can buy up 10 brands and have one factory make them all just slightly different for a fraction of the cost of a single small run, however you can't say to specialized make something at a lower cost, without it having a lower value, as up to 75% of the bikes' inherent value is what is hanging on it, and they (the brand) usually don't make that.
Planet X has been on and off successful at that model, but their main advantage has been low costs ultimately, driven by no retail costs. Even if SD close the smallest 50% of stores they still have a store network that doesn't fit the pile it high sell it cheap mantra, so it will be interesting to see what direction it takes.
Jon – you’re obviously very knowledgable on the subject. How do you think it is that the big four are allowed to continuously sign off the accounts for companies that fold, often with huge black holes in their accounts? They seem to do so with impunity, yet it happens time after time after time
Google: KPMG Conviviality Retail.
Fastest corporate collapse in British history. The core reason (apart from Diana Hunter going on an ego trip) was terrible accounting, yet KPMG had signed their accounts off. KPMG are currently under investigation by the industry watchdog, I think
Why aren’t the whingers on here decrying the venture capitalists who have driven Evans onto the rocks with excessive debt?
This in spades. And its happening everywhere.
Why aren’t the whingers on here decrying the venture capitalists who have driven Evans onto the rocks with excessive debt?
They all thought Evans was great whilst being run at a loss as they could buy parts cheap.
@ B.A.Nana Conviviality was not such a great example as that was a rarer (but not that rare unfortunately) example of a company being brought to its knees by appalling management, hubris and as you said, ego. A good old fashioned story of greed and stupidity - sure bad accounting didn't help and any half competent (or non criminal) auditor would have sniffed out the problems immediately
Was just about to say the same thing. VC companies are speculative parasites. Buy a business, strip it, drive unsustainable short term profit to put lipstick on the pig and then sell it on. The only good news here is that they bought for about £80m and have sold it for about £20m.
Who wins: Mike Ashley (at least until consumers start rejecting his new empire of brands).
Who loses: Sadly Evans staff (say what you will about their service, it's a sad day - nobody got up in the morning and set off to work there wanting to be second rate), definitely consumers (less choice = a bigger monopoly for Wiggle/CRC) and the High Street (who knows what that will look like in 10 years time?!).
I was not a regular at Evans, but they did drive availability and accessibility to get more people riding which can only be a good thing.