Financial Crisis Urges Halfords to Open More Bike Shops

REDDITCH, UK – The economic downturn in the UK is driving millions of commuters on to their bikes and with that urges Halfords to open 50 more BikeHut stores. The national cyclists' association CTC predicts that because of the credit crunch the number of miles cycled in Britain will increase by 40% while the number of commuters cycling to work has increased by 3.3 million since the start of the financial crisis last September.

All this is driving Halfords to rapidly expand its cycling and car maintenance divisions. At the recent presentation of the half year financial results, Halfords CEO David Wild announced the opening of 50 new bike-only stores in the UK under the names BikeHut and Cycle Republic. These shops will largely focus on capitalization of the success of one of Halfords own bike labels: Boardman.

David Wild also stated that the retailer is testing a stand-alone cycle store in York and Norwich adding that the company will increase the speed at which it opens stores in central Europe, following a successful trial.

Focus on a strong store opening programme

“For the label Halfords, we estimate that there is capacity for at least a further 100 Halfords stores across the UK and Republic of Ireland. Our focus on a strong store opening programme, taking advantage of improved availability of retail property, will see a further 15 to 20 new Halfords stores in the UK and Republic of Ireland during the current financial year.”

In East Europe Halfords has managed to make a successful start. After a detailed evaluation phase, Halfords opened its first three stores in the Czech Republic last year and established a regional office in Prague. Plans are now in place to at least double the number of stores in the Czech Republic during the next financial year, and to introduce the concept to Poland.

Similar to other countries in Central Europe the Polish economy is fast growing, with a substantial older car parc than Western Europe. The first Polish store has been opened this autumn in Wroclaw, southern Poland.

In the 26 weeks period up to 26 September 2008 Halfords’ revenues totalled GBP 407.1 million (€ 480.7 mn), up 1.6%. Like-for-like sales however decreased by 1.1% while operating profit was up 4.6% to GBP 55.0 million (€ 64.9 mn). During the 26 weeks Halfords saw solid growth in its traditional core areas of car maintenance and cycling. 

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