LONDON, UK (Dec 13) - Autobacs Seven Co Ltd, Japan's largest car accessories retailer, has purchased a 5 pct stake in Halfords Group PLC, the UK car parts and cycle retailer.
Autobacs said it acquired the holding, some 11.4 mln shares, to 'further develop' the two companies' collaboration agreement that was signed in July.
Yesterday CVC, Halfords' private equity backer, sold 8 mln shares in the UK company, reducing its holding from 20 % to 15 %t. Autobacs is believed to have purchased these shares.
The July collaboration deal fuelled speculation that Autobacs could emerge as a potential bidder for Halfords.
This comes at a time when Halfords in under fire for 'turning the screw on suppliers'.
HALFORDS is demanding tough new payment terms from suppliers in a move that could spark a major Office of Fair Trading inquiry into its dominance of the sector.
The car parts and bicycle retailer has told suppliers that from next year they will be paid 120 days after invoicing the company instead of the present 90 days, which itself is considered excessive. In addition, Halfords is demanding a five % across-the-range cut in prices.
The Financial Mail revealed that catering giant Compass often delayed payments to boost its balance sheet. Also, Tesco and Asda were accused of prolonging payment periods to fund growth.
Halfords, which has almost 400 stores, is 12 times bigger than its nearest rival, leaving suppliers particularly vulnerable to its demands on payment and pricing.
Halfords denied it was using suppliers to pay for expansion. 'The growth of the business is being funded by sales and suppliers will grow with the company,' it said.
Based on Halfords' figures for last year, if the payment period was 120 days, it would benefit by an extra £53.2 million - almost twice capital spending for the period.