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Major Shareholder Pushes for Halfords NL Sale

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Macintosh Retail Group NV owner of, among other companies, Halfords NL, should consider selling its Halfords chain of bikes and car-parts stores, said major Macintosh shareholder

Major Shareholder Pushes for Halfords NL Sale

VEENENDAAL, The Netherlands – Macintosh Retail Group NV owner of, among other companies, Halfords NL, “should consider selling its Halfords chain of bikes and car-parts stores”, said major Macintosh shareholder Frederik van Beuningen yesterday in an interview with Bloomberg.

“Macintosh should focus on its shoe stores, which are more profitable”, continued Van Beuningen, MD of Teslin Capital Management, who raised its stake in Macintosh to 7% from 5% in the past year.

“You can be good at something if you’re focused. I believe in focused companies,” Van Beuningen said in the Bloomberg interview. He continued: “By divesting assets, including the Halfords stores but also the Kwantum chain, Macintosh could raise capital to open new shoe stores. Either through a sale or initial public offering, Macintosh’s management should in time and at its own pace take the next step in further aligning its portfolio.”

Van Beuningens pressure on the Macintosh Retail Group is based on the large difference in profit generated by the several retail divisions of the holding company. In 2008 the operating margin at its fashion unit was 13 % in the second half, compared with only 3.2 % for automotive and telecom and 11 % at the ‘living’ division.

In June, Macintosh already sold its Belcompany stores in Belgium to Telenet Group Holding NV for € 6 million in cash. That followed last year’s purchase of Brantano Group NV for € 158.2 million, giving Macintosh 12% of Belgium’s shoe market and the € 140 million acquisition of shoe discounter Scapino in 2006, granting it 13% of the Dutch market.

“If an interesting option to sell Halfords occurs, we owe it to our shareholders to investigate that”, Macintosh Chief Financial Officer Theo Strijbos said according to Bloomberg. “But we’re not actively seeking a change in our portfolio.”

Founded by Van Beuningen in 1991, Teslin manages about € 180 million in three funds. Teslin’s Darlin fund rose 47 % this year, outpacing the 29 % gain of the 24-member Amsterdam Small Cap Index.

In an interview with the Dutch dealer magazine ‘Tweewieler’ last February Willem Marcelissen, MD of Halfords NL, emphasized the growth potential of the bike business within Halfords. He considered that potential bigger compared to Halfords’ business in car P&A. But not big enough as it appears from Van Beuningen’s suggestion to sell the complete Halfords stores.

Halfords NL operates 136 city stores (each with about 300 square meters shop floor) as well as 14 Superstores (with 600 m²) in The Netherlands as well as 9 stores in Belgium. It is estimated that the retail chain sold about 120,000 bikes in The Netherlands in 2008 giving it a 10% market share. Halfords NL employs about 1,100 people.

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