Halfords has announced plans to close a number of its garages this year, citing increased labour costs following changes in last year’s Autumn Budget. Shares in the company saw a nearly two per cent drop as markets opened following the news.
Halfords specified that the garages slated for closure are those that “failing to meet the level of customer experience to which we aspire.” The company reported a £33m increase in costs due to higher National Insurance Contributions (NICs) and the minimum wage hike. Halfords assured that most affected colleagues would be relocated to nearby garages and stated that the planned shutdowns would “immediately” boost earnings, though the exact number of closures remains unconfirmed.
Over the past year, the retailer has already sold off 11 stores, including locations in Devon, Hampshire, and Dudley. As of March 28, Halfords operates 373 retail shops and 632 autocentres.
Despite the closures, Chief Executive Henry Birch expressed optimism about Halfords’ overall performance, stating: “The business has delivered a strong financial performance [this year], made good strategic progress and has a clear plan in place to tackle external inflationary forces.” He highlighted Halfords’ unique market position with its combination of retail stores, garages, and mobile vans.
The company reported a 2.5 per cent rise in like-for-like sales up to March 28, with total income reaching £1.7bn. Underlying profit before tax increased by 6.4 per cent to £38.4m, and gross margin improved from 48.2 per cent to 50.7 per cent. Julie Palmer, partner at Begbies Traynor, described the financial outcomes as “encouraging,” noting strong demand from cyclists but caution among motorists.
Halfords ended the financial year with a net cash position of £10.1m, up from £8.1m. The company expects to offset future inflation through “pricing, buying and cost opportunities,” while remaining cautious about consumer spending outlook. Halfords reiterated its commitment to a strategy focused on motoring services across its diverse retail and autocentre network.
Source: Business Live
Nathanael Warden
They’ve only just bought out national tyres and exhausts! Something tells me this was always a long term plan….
Eddie Bamber
Perhaps a shift away from general garage repairs and more towards fast fit tyres and exhausts ?
dee
and the recent £££ fine for not paying NMW obviously didnt have an impact….
Mark
We just love quick fit fitters