Halfords has said that it plans to close its Cycle Republic chain, currently trading from 22 stores throughout the country, following a review of the business. The company, which sells more bikes than any other retailer in the UK, has also said that it plans to shut the Boardman Performance Centre.
In a statement, Halfords said that the proposed closure of the chain, relaunched in late 2014 with its first store next to London’s Euston Tower, “reflects the challenging economics of a store-based dedicated performance cycling operation.
“Exiting a low-returning, stock intensive business allows us to improve our return on capital whilst freeing up investment and resources to continue to drive our services-focused strategy, with an emphasis on accelerating the growth of our motoring businesses.
“The proposed closure is expected to be marginally accretive to earnings in FY21 and will also enhance cashflow and net debt on an ongoing basis, principally through lower working capital requirements.”
The 2014 relaunch of the brand came five years after the retailer announced in September 2009 that it was closing its then eight standalone bike shops, trading under either the Bikehut or Cycle Republic fascias.
One store, in York, closed, with the other seven converted into high street branches of Halfords. The Bikehut brand itself was retained for use within Halfords stores.
In today's announcement, Halfords said that it would be consulting with 226 staff impacted by the decision and hoped to avoid redundancies as far as possible, adding that it plans to focus on its mainly online Tredz business, bought in 2016.
The company said that Tredz "offers a winning proposition for the Halfords Group to unlock its ambitions to grow and enhance the performance cycling market.”
It continued: “The group proposes to reduce the overlap in its brands and singularly focus its investment and resources into Tredz. We intend to make an initial substantial investment in logistics and It infrastructure during the course of the next financial to help Tredz further growth.”
The company added: "Mainstream and performance cycling are important markets for Halfords.
“With the proposed investment in Tredz, alongside the core Halfords Retail cycling business, the company believes it will be uniquely placed to serve both the enthusiast and the mainstream customer and support further market growth.
“Both Tredz and Halfords Retail offer unique and differentiated customer propositions, with high brand equity and stronger business economics.”
Incorporating a wind tunnel and a physiology lab, the Boardman Performance Centre opened in Redditch, Worcestershire (the town where Halfords is based) in 2018.
Commenting on its planned closure today Chris Boardman, who remains chairman of the Boardman Bikes business he sold to Halfords in 2014, said: “Whilst I’m obviously disappointed the Performance Centre isn’t going to form part of our strategy going forward, I do understand the immense pressure Halfords, along with other retailers, is under right now.
“Pioneering, worlds-first things like this take courage to back, and we need to remember Halfords showed leadership in enabling us to do something different and wonderful.
“This was a tough decision and I know it wasn’t taken lightly. It is my hope that we can find someone who is in a position to take the centre on as a going concern.
“It’s still an amazing place and most importantly, it has an amazing team. That’s what I will be striving for over the next few weeks.”
Halfords CEO Graham Stapleton commented: “The board has come to the difficult, but necessary, decision to propose the closure of Cycle Republic, our retail store-focussed performance cycling brand.
“This proposal is not a reflection of the hard work of our Cycle Republic colleagues, who I would like to thank for their commitment and passion in serving our customers.
“We are now moving into a Classification: Restricted period of consultation with impacted colleagues with a view to mitigating as many redundancies as possible.
“Going forward we propose to focus our investment and resources in Halfords and Tredz, through which we will deliver market-leading specialist propositions for both mainstream and enthusiast cyclists via a business model that improves our overall economics.”
News of the planned closure of Cycle Republic comes two months after road.cc revealed that retail group Outdoor and Cycle Concepts had informed staff at its Cycle Surgery chain that it planned to close that business, which it described as “unsustainable.”
Simon has been news editor at road.cc since 2009, reporting on 10 editions and counting of pro cycling’s biggest races such as the Tour de France, stories on issues including infrastructure and campaigning, and interviewing some of the biggest names in cycling. A law and languages graduate, published translator and former retail analyst, his background has proved invaluable in reporting on issues as diverse as cycling-related court cases, anti-doping investigations, and the bike industry. He splits his time between London and Cambridge, and loves taking his miniature schnauzer Elodie on adventures in the basket of her Elephant Bike.