Motor accessories specialist Halfords is to shut its fledgling central European business after recessionary conditions set back expansion opportunities.
The retailer will close its seven shops in the Czech Republic and Poland this summer, taking an exceptional charge of £7.9m. The central European business made an operating loss of £2.8m in the last 12 months.
Halfords chief executive David Wild noted recent performance in central Europe had improved and that the area has “long-term attractive characteristics”.
However, he said: “The continuing recession is severely limiting the property opportunity to move the operation to a viable scale. While an international strategy clearly represents an opportunity for future growth, the board has decided that management and financial resource is better devoted, at the present time, to the lower-risk opportunities in our core market.”
Halfords reported that group sales rose 1.3% in the 11 weeks to March 19 and like-for-likes were up 0.8%.
Nationwide Autocentres’ like-for-likes rose 5% in the four weeks since its acquisition.
Wild said Halfords’ retail performance was “robust” and full-year profits are likely to be ahead by about 25%.