Halfords has reportedly made an indicative offer to buy rival Evans Cycles as its new boss Graham Stapleton reveals his vision for the business.
According to Sky News, the cycling and automotive specialist is among a number of parties to have tabled initial bids for Evans, which requires more than £10m in capital in order to get through the next few months of trading.
The news emerged as Halfords prepared to present its new strategy at a Capital Markets Day, which will focus around the mantra: “To inspire and support a lifetime of motoring and cycling”.
Halfords said it would build on the “solid foundation” it had created over the past two years to become “a truly differentiated, service-led super specialist”.
It said it would “inspire” its customers through a differentiated shopping experience, and support them through “an integrated, unique and more convenient” services proposition.
In order to deliver on that strategy, capital expenditure would increase from the guided £40m per year to £60m a year in “the medium term”, the retailer added.
It pledged to plough “significant investment” into stores, garages and digital platforms.
Halfords added that it had kick-started a “wide-reaching” cost and capital efficiencies programme, which would allow it to fund the expected increase in capital expenditure.
As a result of the planned investments, Halfords said it anticipates pre-tax profit in its 2019/20 fiscal year to be “broadly flat” on 2018/19.
It forecasts “mid-single-digit percentage annual growth” thereafter.
Chief executive Stapleton, who will deliver his strategy presentation to the City later today, said: “We are a strong and growing business that benefits from a solid financial platform and highly experienced and capable colleagues.
“However, customer behaviours and the competitive environment are changing and we face an increasing number of headwinds. Our new long term strategy means we will become far more focussed on the categories we are best known for, motoring and cycling.
“We will have a more convenient, easy to shop and scaled services business, offering a thousand service locations. Customers will also benefit from unique product, services and shopping experiences all underpinned by integrating the separate businesses within the group.
“We have an exciting future ahead and I am confident that we will become even more relevant to motoring and cycling customers in the future.”