Halfords has confirmed a plan to continue the consolidation of its business with closures of up to 60 stores and garages by April 2021.
The company has said it will eventually close around 10% of the its 843 branches, 472 of which are store-based. The decision said to be pinned to both the impact of the Coronavirus, but also to looming Brexit driven risks to the business.
While Halfords enjoyed the benefits of a spike in cycling sales attributed to the need for alternate transport during lockdown, the motoring arm levelled the company’s gains, falling away by 45.5% as car journeys fell drastically. It is, however, likely to be the motoring arm that will be the firm’s long-term focus due to higher profit margins than with its cycling trade.
The news comes on the back of the winding down of the firm’s Cycle Republic chain, with 11 stores dealt to new business Pure Electric, which now has rapid expansion plans in the e-Mobility sector. Much of the stock from Cycle Republic was transferred to Halfords premium cycling business Tredz during the pandemic’s peak, which quickly sold through much of the product thanks to surging demand.
“Covid-19 has materially changed the retail outlook for the coming months and has overshadowed Brexit as the emerging risk,” said the firm in a statement.
Around 75 of the chain’s stores have yet to open on the back of Covid-19 led closures, though are likely to in the coming weeks.
Employing around 10,000 people, the closures will very likely see jobs lost. Five other Halfords branches have already been closed.
A warning that the firm could see a £10 million loss came as part of the recent financial update, based on a scenario where sales slip by 9.5% this year. On the flip-side of the coin, if a best case scenario is realised Halfords would expect underlying profits of £20 million. This would remain significantly down against the prior year’s £53 million.