Halfords UK Pulls Out of Central Europe

REDDITCH, UK – Bicycle and car parts retailer Halfords Group announced the closure of its loss-making operations in Central Europe. While the operations in the UK & Republic of Ireland are profitable, the seven stores in the Czech Republic and Poland generated an operating loss of GBP 2.8 million (€ 3.1 mn) over the past 12 months.

“In our retail business and acquisition strategy we will focus on our home market in the UK and the Republic of Ireland”, said Halfords CEO David Wild, who was appointed CEO mid 2008 and had a wide experience in expanding retail business with Tesco in Central Europe.

“Recently the performance in Central Europe has improved and still offers long-term attractive characteristics”, said David Wild. “However the continuing recession is severely limiting the opportunity to move the operation to a viable scale. While an international strategy clearly represents an opportunity for future growth, we have decided that management and financial resource is better devoted, at the present time, to the lower-risk return opportunities in our core market.”

Withdrawal from the Poland and the Czech Republic will cost Halfords € 8.15 million. The shops will close their doors this summer.

Completely contrary to the Halfords move; Decathlon is expanding its activities in Central and Eastern Europe. The sporting goods giant plans to open its 3rd store in Russia in a few months. A second store is to open in Rumania while Decathlon is to enter the Czech market later this year.