Halfords, the specialist cars parts and cycles retailer, has revealed it has repaid more than £10 million in government furlough payments, thanks to a surge in demand for bicycles during the Covid-19 (Coronavirus) pandemic.
An overall sales uplift of +6.2% for the first seven weeks of 2021 means it has given back all of the £10.7 million it received in state-provided furlough money.
The rise is believed to be linked to people increasingly choosing to cycle short distances rather than using public transport during the current and previous lockdowns. In the same seven-week period cycles sales were up by 43%.
A trading statement issued by the retailer said: “Although we have continued to experience a volatile trading environment across the first seven weeks of the fourth quarter, overall trading has been stronger than we initially anticipated across the business.”
Initially, 335 of Halfords’ 446 stores were able to open as ‘dark stores’, whereby customers were unable to browse but could collect orders outside the front of its stores. But later, as it became one of a small number of retailers to be granted essential retailer status, it has been under pressure to return furlough money received.
Its statement revealed the business is now eying up underlying profits of around £90-100 million for the current financial year – up from £56.2m in the previous year. Analysts had expected profits to be £71m. After the announcement, shares in Halfords jumped 12%.
Growth though hasn’t prevented some stores from closing. Halfords also announced it would be closing one of its Nottinghamshire stories on 19 March. Staff will be offered roles in shops in alternative locations.
Halfords said a decision has yet to be made about whether it also returns business rates – the absence of which it has profited from.