Redditch-based Halfords Group is proposing to close its Cycle Republic and the Boardman Performance Centre following a strategic review of the Group’s cycling businesses.
The company said that running a store-based, stock-intensive business was challenging and closing Cycle Republic will free up investment and resources to drive its services-focused strategy, with an emphasis on accelerating the growth of its motoring businesses.
The company has around 23 Cycle Republic stores across the UK, including in Evesham, Bristol, Cheltenham and Reading.
Performance Cycling is an important category for Halfords, and it also owns Tredz, a predominantly online cycling business.
The company said: “Going forward, we believe we will better serve this market by singularly focusing our investment and resources into the Tredz brand, which has both a differentiated and specialist customer proposition and a superior business model in this part of the cycling market.
“With investment in the Tredz business, alongside our core Halfords Retail cycling business, we believe we will be uniquely placed to serve both the enthusiast and the mainstream customer in a more economic way than we do today.”
Halfords has launched a consultation process with the 226 colleagues affected by the proposal, to mitigate redundancies where possible. It is also actively exploring opportunities to sell the sites as a going concern. Subject to the outcome of current negotiations and consultation, the stores are expected to close during the first half of next year.
The proposed closure does not affect the previously stated profit guidance for this year. In the year ended 29 March 2019. Cycle Republic made a loss of £4.3 million, with the FY20 loss expected to be materially smaller.
Graham Stapleton, CEO said: “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 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.”