The chief executive of Halfords has launched a stinging attack on the state of its retail business and admitted profits will fall over the next two years as it invests £100m to turn around its performance.
Matt Davies, the former boss of Pets at Home who joined Halfords in October, gave his frank assessment as the car repairs-to-bikes group posted annual profits down by more than a fifth and slashed its final dividend by 35 per cent.
His three-year strategic review spooked investors and Halfords' shares dived nearly 16 per cent to 333.3p yesterday.
Mr Davies said that about half of the £100m would be spent on refurbishing its stores, which customers have criticised for being "tired" looking, often short of stock and offering "variable" levels of service.
Pre-tax profits tumbled by 22 per cent to £72m over the year to March 29, on sales up by 1 per cent to £871.3m. Mr Davies said its target of growing revenues to £1bn by 2016 was "ambitious", as retail like-for-like sales have fallen in 10 of the past 13 quarters.
He said: "This is a business that has been going backwards consistently."
It is putting all its 10,500 store staff on a training programme over the next three years, in an effort to improve staff turnover rates in excess of 50 per cent a year.