Halfords turnaround plans steps up a gear after sales missed expectations

 
Catherine Neilan
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Halfords is hoping to move up a gear (Source: Getty)

Halfords is literally stepping up a gear on its plans to rebuild the company.

The cycle business has just completed a three-year initial strategy called "Getting into Gear" - and is now replacing that with a new initiative called "Moving Up a Gear". See what they did there?

The new strategy has five key "pillars": investing in customer data and insight , focusing on customer service, increasing the number of exclusive products, partnerships and innovations, developing a "seamless" customer experience online and in-store and "moving from fixing the basics to improving efficiency and fulfillment".

The new strategy comes as Halfords missed expectations in its first half, with like-for-likes up 1.7 per cent – below consensus, which had put it at three per cent, and down from seven per cent in the same period last year.

Profit before tax for the 26 weeks to 2 October was down 6.5 per cent from £49.6m to £46.4m, with new chief executive Jill McDonald blaming bad weather for hitting summer sales.

With the new strategy in place, the company expects to have flat profit for 2016 and 2017, posting growth from that point on.

McDonald said: "In the first half the motoring side of the business performed well and in-store service sales grew strongly, reflecting our focus on this key area of differentiation. The cycling performance in the second quarter was disappointing and, given the seasonal mix towards cycling during the summer, this contributed to the decline in group profitability for the period. Looking forward, there are plenty of reasons for us to remain confident that the cycling market will continue to grow over the long-term.

She added: "After three years of investing to stabilise the foundations, improve service levels and grow sales, Halfords is now a fundamentally strong business, operating in markets with good growth prospects. However the modernisation process is not yet complete. Under the new strategy we will continue to invest to move from fixing the basics to enabling sustainable growth.

"There are a number of significant opportunities for further improvement, which include the leveraging of customer data and analytics, relentless innovation, a better shopping experience, enhanced customer service and services, and a fulfilment infrastructure for modern times. We look forward with confidence to growing Halfords over the long term."

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