Halfords UK Take-Over Results in Access to Cube, Giant and Specialized
REDDITCH, UK – UK’s biggest bike retailer looks to expand its internet reach and has gained access through its new acquisition to premium brands such as Cube, Giant and Specialized.
UK cycle and car parts retailer Halfords has just paid GBP 18.4 million (€ 24.2m) for online bike retail specialists Tredz and Wheelies. Wheelies is also the UK’s largest provider of replacement bikes for insurance companies. Halfords claims some 20 – 15% of the UK cycle retail market.
Profit and sales
Tredz and Wheelies have around 250 employees between them and last year made a profit of GBP 2.4 million (€ 3.2m) on GBP 32 million (€ 42.0m) sales. They will also receive a performance-linked additional payment in 2017 from Halfords.
E-commerce start in 2005
Wheelies started life as a single bike shop, founded in Swansea, Wales in 1989 by brothers Keith and Michael Jones. Tredz was launched by the same team as a separate e-commerce business in 2005. Tredz also opened the UK’s largest Giant branded store in Swansea in 2014. The businesses will continue to be led by Keith Jones as managing director.
Online market for premium bikes
Halfords CEO Jill McDonald said: “We believe this is a strong and complementary addition to the group, extending our presence in the online market for premium bikes, parts, accessories and clothing.”
Interestingly both firms will continue to trade under their existing names. Andy Donald of Maitland, a corporate communications consultancy that works with Halfords, told Bike Europe, “The acquired businesses will be operated as standalone ones – Halfords doesn’t want to do anything to disrupt the momentum these businesses are on. Over the medium-term they will look at ways in which they can further the growth, for example through logistics support.”
Closer relationships with premium brands
Aside from an increased online presence it is thought the acquisition could also give Halfords increased influence with major premium cycling brands, something it has not always had. Cannaccord Genuity analyst David Jeary said the acquisition “ticks the boxes” for Halfords and that premium cycling brands that have despised Halfords previously, may change their attitude, “There is the potential over time for Halfords to develop closer relationships with some of these brands which have historically not made themselves available.”
On the back of the acquisition news Halfords shares took a 3% upturn in value, strengthening their recovery from the price drop triggered by disappointing cycling product sales last summer.