Halfords is to close its standalone Bikehut and Cycle Republic stores as it revealed a group sales drop of 1.7 per cent in the first quarter of the year.
In the 13 weeks to March 27, like-for-like sales fell 3.8 per cent as demand for sat-nav products fell. Taking into account the effect of Easter, the retailer said group sales fell 0.9 per cent and 3 per cent on a like-for-like basis.
For the full year to March 27, group sales fell 1.2 per cent, a 3.3 per cent like-for-like fall.
The retailer said that its car maintenance and cycling divisions delivered like-for-like growth and increased market share.
However, sales in the car enhancement range fell due to the decline in demand for higher ticket sat-nav products.
Halfords will rebrand its Bikehut and Cycle Republic stores to the full Halfords offer via the Metro format, after the success of its superstores in the premium market hit sales at the standalone fascias. They were also affected by the migration of sales to the internet.
The cost of exiting the standalone formats and the closure of stores will total £1.2m
The retailer has also begun a programme to reduce costs by £10m and will focus on investing in its store portfolio, cost control, extending its range and service offer and driving its multichannel offer.
These initiatives are set to complete over two years at a cost of £16.5m.
Halfords is expecting to report annual profits before tax of between £92m and £92.5m.
Halfords chief executive David Wild said: “Our early action to reduce costs and maintain a prudent balance sheet provides a solid platform for future earnings growth from our core strategic growth initiatives.
“The integration of our standalone cycle pilot into the main business signals our intention to focus our efforts on enhancing shareholder value through the more material expansion opportunities presented by Central Europe and our multichannel activity, where we continue to generate significant sales growth”.