Cycle Surgery, one of the UK’s largest specialist cycling retailers, is being closed down by its owners, road.cc can reveal, with parent company Outdoor and Cycle Concepts saying that the business is “unsustainable.”
According to a Colleague Information Pack sent this week to employees by Outdoor and Cycle Concepts, a copy of which has been seen by road.cc, it is anticipated that the closure process will take eight months to complete.
In all, some 200 staff are affected by the closure and while Outdoor and Cycle Concepts says it hopes to relocate staff to other businesses within the group where possible, some redundancies are inevitable.
Cycle Surgery was founded in 1992 as a bicycle workshop in a basement just off North London’s Holloway Road and by 2015 had expanded to around 30 stores. At that point it was owned by outdoor retailer Snow + Rock, which also owned the Runners Need chain.
Snow + Rock was bought by Cotswold Outdoor’s Netherlands-based parent company AS Adventure Holdings in May 2015, with the group subsequently renamed Outdoor and Cycle Concepts.
In April last year, the group announced that it was seeking a company voluntary arrangement (CVA) with its creditors, which they approved the following month.
The group, which made a pre-tax loss of £20.2 million on sales of £187.4 million in the year ended 31 December 2018, said in its annual report that it in seeking the CVA, it aimed “to restore profitability across the store portfolio and reduce the cost base of certain stores.”
In its announcement to Cycle Surgery staff regarding the planned closure of the business, the company said: “In the past 3 years, partly down to market conditions, but also due to the complexity of Cycle Surgery and, in some instances, our operating mistakes, Cycle Surgery has lost over £3 million. The picture looks worse if we look back even further. This is unsustainable.
“Unfortunately, to add to the pressure, we have been unable to come to satisfactory agreements with the landlords to make Cycle Surgery viable for the future.
“Today, following the difficult decision taken by the Board of Directors and leadership team, we are announcing the proposed closure of Cycle Surgery.
“This will unfortunately mean that some or all your team will be put at risk of redundancy and will enter a 45-day consultation period.
“Those individuals affected will be informed later today. As part of the consultation process, there will be collective consultation, which we will hold elections for individuals to represent their colleagues.
“We plan it will take 8 months to cease trading Cycle Surgery, ensuring we’re managing the process in an orderly, professional and humane manner in line with our values. We’re all absolutely committed to support all people affected in the best way we can. We’re determined to relocate as many colleagues as possible, thus avoiding unnecessary redundancies, while mitigating disruption to the wider business and our customers.
“The main impact of this decision will be on those colleagues, functions and roles which primarily support the Cycle Surgery operations.”
Currently, Cycle Surgery trades from 14 stores. Five of those, as well as the Cycle Surgery website, will cease trading under the plans announced this week, while nine will be converted to other brands within the group.
The company added: “By making this tough decision, we can unlock investment to other areas of our business to improve the quality of service and offering to our customers and employees. Cotswold Outdoor, Snow + Rock and Runners Need will continue operating but with a higher level of investment guaranteeing the future of our group.
“The leadership team will be as transparent as they can as we make these changes. They will be visible across the business over the coming days and weeks – talking with colleagues, listening to concerns and openly communicating regularly as our plans take shape.”
We are trying to contact Outdoor and Cycle Concepts for confirmation of the closure of the business.
Simon has been news editor at road.cc since 2009, reporting on 10 editions and counting of pro cycling’s biggest races such as the Tour de France, stories on issues including infrastructure and campaigning, and interviewing some of the biggest names in cycling. A law and languages graduate, published translator and former retail analyst, his background has proved invaluable in reporting on issues as diverse as cycling-related court cases, anti-doping investigations, and the bike industry. He splits his time between London and Cambridge, and loves taking his miniature schnauzer Elodie on adventures in the basket of her Elephant Bike.