CVC Capital Partners bought Halfords in July last year for £410m. Jonathan Feuer, MD of CVC, said at the time:
"The acquisition represents CVC’s continued strategy of investing in well-positioned businesses on a long-term basis despite the current volatility of world stock markets."
However, some industry analysts now believe CVC is trimming back costs at Halfords because of poor Q1 trading and less than positive projected sales, leading to speculation the company will be sold on next year.
Other analysts believe the HQ redundancies are a way to make Halfords a leaner, meaner fighting machine.
It’s unclear whether current ambitious plans for Bikehut are likely to be scaled back. A sexy new Bikehut flagship store is being unveiled in Burton on Trent in mid-April but this new format may not now be rolled out nationwide as fast as Halfords insiders were planning for just a few weeks ago.
And the pruning back of the two-wheel team at Halfords is a pruning too far for many suppliers to Halfords.
IBDs, however, may be bolstered by the news, despite the fact Halfords is a major engine for growth in the UK bike trade. The IBD chains stand to be emboldened the most because of their better capitalisation.
Not all ‘chains’ are cash rich, mind, one is at death’s door and another, the conveniently-named The Bike Chain, recently went into administration.
The Bike Chain was, of course, the store-in-store bicycle retail outlets within 15 of the 16 YHA Adventure shops nationwide.
YHA Adventure Stores was on stop with plenty of outdoor suppliers for some time. The blame for the chain’s demise was put on three factors: foot-and-mouth, September 11th, and a costly store opening in London. The flagship Wardour Street store ate cash, and the loss, two years ago, of the Southampton Street store, just off Covent Garden, thanks to decision by the landlord, left a big hole in YHA Stores accounts. A new Covent Garden store was added last November but, by then, customers had been lost and the damage done.
Karrimor has subsquently bought out the YHA Stores from administration and has done deals for the bike stock but the Lancashire company – which started out as a post-WWII manufacturer of cycle pannier bags – is undecided on whether to remain as a retailer of bicycles. Karrimor already has its own chain of sole-brand stores and does not major on bicycle products.
The outdoor trade is dominated by one major retailer, Blacks. To date, Blacks has not stocked bikes.
One outdoor retail chain that does stock bikes is Decathlon. This French retailer now has five stores in the UK: Surrey Quays, Romford, Merry Hill, Nottingham and Stockport. Another is due to open in Sheffield.
To date, Decathlon – which only retails own-brand bikes, albeit ones now seen in the pro-peleton thanks to bike deals with Cofidis and AGr2 – has not been a major mover and shaker in the UK bike trade. But this could be about to change. Decathlon France is talking about ramping up investment in the UK, especially on the bike side.
Decathlon has 320 stores, 210 of them in France.
Before the opening of the London Surrey Quays store there were fears that Decathlon would be a dominant force (the chain certainly dominates the French retail scene) but the store design and product offerings were strangely out-of-context in the UK. This might be about to change, and Decathlon could take market share from a trimmed-to-bone Halfords if it ceases to invest in Bikehut revamps.
The world of corporate bike retailing might be in flux right now but of more importance to all retailers of bicycles is the relative lack of sales.
Britain is basking in unseasonal Spring sunshine, very similar to the spurt of good weather we had at the same time last year. However, last year this site was reporting bumper sales and a potential shortage of bikes, but this year’s good run of weather is not leading to any major boom in sales.
Are boom-booms elsewhere in the world therefore deflating demand? And if so, will corporate retailers be hurt more than independents?