It’s not hard to understand why Tesco boss Dave Lewis was keen to snap up then-Halfords chief exec Matt Davies to turn around the supermarket’s UK business. Davies, who switched roles last month, leaves his successor Jill McDonald with a business in the rudest health it's been for a long time.
Halfords' latest results, published today, show that the bike and car parts retailer narrowly squeezed past the £1bn annual sales mark for the first time ever, with total revenues up 6.9% in the 52 weeks to March 27. Pre-tax profits were up by a solid 11.4% to £81.1m.
‘This was another year of strong revenue growth, this time against tough comparatives, and leading to a pleasing improvement in profitability,’ said the company’s chairman Dennis Millard. ‘We are delighted to have exceeded £1bn of Group Revenue, a year ahead of plan, and are building a sustainable platform for future growth.’
The success has been attributed to the ongoing ‘Getting into Gear’ strategy unveiled by Davies in 2013, which plays host to some of the most corny corporate language on the planet. For instance one plank in the plan, ‘The H Factor’, aims to ‘[reassert] the business' proposition authority to Support Drivers of Every Car, Inspire Cyclists of Every Age and Equip Families for Their Leisure Time.’
It's hard to argue with the numbers though. Sales of bikes and cycle accessories were up 11.4%, with like-for-like sales of top-end bikes up an impressive 29%. That’s likely in no small part down to the increasing ubiquity of lycra-clad commuters, but car maintenance sales were also up 8.4% and revenues from its 305 autocentres were up 7.6%. Its net promoter score, the proportion of customers who say they would recommend it to a friend, is up from 55% in 2013 to 78% this year.
Davies’ replacement, Jill McDonald, has a reputation that precedes her. As head of McDonalds’ European division she’s driven solid growth while the American mothership has faltered. But she’s new to bikes and car parts, and out of town retail in general, so could find Davies a seriously hard act to follow.