Halfords looking to branch out into central Europe as sales buck downward trend
Friday 06 June 2008
Halfords has revealed plans to accelerate its store numbers in central Europe, as UK consumers' thirst for bikes and car maintenance products drove its pre-tax profits up by 11 per cent.
Its joint managing director Nick Wharton said the performance of its stores in the Czech Republic convinced the retailer to open its first store in Poland.
The car accessories-to-bike retailer said it will unveil the first Polish store in Wroclaw this autumn. Halfords opened three stores in the Czech Republic last year, but Mr Wharton said it was also considering Slovakia and Hungary. "The cars in central Europe tend to be a little bit older which is very good for our car maintenance products," he said.
Mr Wharton did not rule out entering the lucrative Russia market, but said its focus for the foreseeable future was central Europe. Halfords also has 17 stores in the Republic of Ireland.
For the year to 28 March, Halfords recorded total sales of £797.4m, up 7.2 per cent.
Mr Wharton claimed that Halford's product offer and business model gives it some protection against the credit crunch and consumer downturn because its average transaction value in stores is just £20. Halfords has witnessed a shift in customers hanging on to their cars for longer and more people holidaying in the UK, which could both help to drive sales of car accessories and maintenance products. Mr Wharton said there was still large growth potential in the satellite navigation market because only 15 per cent of the 33 million cars in the UK have the devices.
The Citi analyst Richard Edwards said: "This feels like a share that could outperform the sector but is unlikely to outperform the market."
Mr Wharton said its Boardman bikes were flying out of the doors and there was a waiting list for certain lines.
He declined to comment on Halfords' search for a new chief executive.
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