Matt Davies, you can tell, is squirming in his seat at being asked about his new role at Tesco during a call for Halfords’ trading update. “I am genuinely gutted to be leaving Halfords,” Davies explains.
“It was absolutely not in my script to be leaving. But when I was approached by Tesco and given the opportunity to run their business in the UK & Ireland and to work with Dave Lewis it was an opportunity I couldn’t miss.”
The truth is that his departure is a huge blow for the bike-to-car parts retailer. The Manchester-born cycling enthusiast was hired in October 2012 to lead a turnaround of the tired chain after a torrid two years when it had issued nine profit warnings.
Davies was previously chief executive of Pets at Home, doubling the size of the dog food-to-pet grooming empire during his eight years at the helm and paving the way for its recent £1.2bn flotation.
More than two years on, Halfords has seen a 70 per cent jump in its share price and an improvement in sales led by a revival in its cycling and car maintenance businesses.
In May 2013, Davies outlined a three-year plan to reach £1bn sales by 2016 but warned that profits would be flat for the next two years as it invested £100m in the business.
The plan, called Getting into Gear, has involved revamping stores with larger cycle areas selling clothing and accessories, investing in staff training, improving customer service and launching a new website.
Halfords capitalised on the cycling boom following Britain’s successes in 2012 in the Tour De France and at the Olympics. The group bought Olympic champion Chris Boardman’s eponymous bike business last year and resurrected its Cycle Republic chain last month, five years after the last store closed its doors.
Commenting on the progress made so far, Davies said: “I think there is still a lot to do but there is an awful lot we have achieved in the last two and a bit years from how we wanted to train our colleagues, to refreshing our stores and linking pay to capability.”
In the third quarter of the year to 9 January, retail sales at stores open for more than a year rose 6.8 per cent, beating analyst forecasts.
Car maintenance sales jumped 11 per cent in the Christmas period as Halfords’ fitting service for bulbs, batteries and wiper blades reached record levels, completing 100,000 jobs in a week for the first time.
In cycling, children’s bikes were the top sellers, with sales up almost 14 per cent. Overall like-for-like cycle sales rose 7.6 per cent.
Halfords is expected to post a full-year pre-tax profit of around £78m with sales close to £1bn. With three months left before he leaves to help turnaround another struggling retailer, Davies said: “Halfords has an incredibly powerful team and I am proud to have attracted some great people into the business. I have every confidence that it will continue to go from strength to strength.”
■ Davies set out a 3-year plan to invest £100m and deliver £1bn sales by 2016.
■ The plan included revamping 150-plus stores and giving more space to cycling.
■ Spending £38m on IT infrastructure, revamping its website and improving its click and collect offer.
■ Halfords launched a qualification programme called 3-Gears to help train some of its 12,000 staff.