Halfords to close its loss-making Cycle Republic chain with 226 jobs at risk - This is Money

Bicycle and auto equipment retailer Halfords has announced it will shut down its Cycle Republic stores.

Over 200 jobs are in danger after the publicly-listed firm said all 22 of its Cycle Republic outlets would close along with its performance centre site in Evesham, Worcestershire as it seeks to focus on its online cycling business, Tredz.

Halfords expects the closures to take place in the first six months of the next financial year and cost them between £25million and £35million. The declaration caused shares in the firm to plummet by almost a third today.

Halfords revived Cycle Republic in 2014 with the first store opening in London's Euston Tower

Last year, the Cycle Republic business reported a £4.3million loss, which is predicted to be 'materially smaller' in 2020. 

Halfords said the business was 'low-returning' and 'stock intensive' and its shutdown will free up investment and resources to drive into its motoring business.

The car parts retailers also said it is looking to mitigate redundancies where possible and is 'also actively exploring opportunities to sell the sites as a going concern'.

Cycle Republic was revived six years ago with the first store opening in London's Euston Tower. It has opened another twenty one stores since then, including a Canary Wharf shop opened by Olympic gold medallist Victoria Pendleton.  

It entered into a long-term strategic partnership with the folding bike manufacturer Brompton Bicycles in 2018 and also sponsored the amateur Morvelo-Basso cycling team as well as numerous British cyclo-sportives.

Halfords chief executive Graham Stapleton said the decision to shut down Cycle Republic was a 'difficult, but necessary, decision,' and was 'not a reflection of the hard work of our Cycle Republic colleagues.'

He added: '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.' 

Cycle Republic partnered with the folding bike manufacturer Brompton Bicycles in 2018 to enable the bikes to be sold in its stores

The Redditch-headquartered company saw revenues grow mildly in the last full-year of its results to £1.14billion. Motoring comprised two-thirds of the firm's revenue, with cycling accounting for the remaining third. 

About 86 per cent of the group's revenue is from its retail division, with the other 14 per cent coming from its Autocentres.

However, their pre-tax profits dropped by nearly a quarter to £51million from £67.1million the year before. Stapleton blamed the 'extremely mild weather conditions' impacting its motoring division and Brexit-related uncertainty for its performance. 

Despite the recent challenges facing the retailer, it kept its profit guidance on the back of a strong boost in its electric bike sales in the Christmas and New Year period. 

E-bike sales were 96 per cent higher in the 14 weeks to January 3 compared to the same period the previous year. Stapleton said the rising sales were down to the increasing popularity of eco-friendly vehicles as concerns about global warming escalate. 

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Halfords to close its loss-making Cycle Republic chain with 226 jobs at risk - This is Money
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