Halfords Group PLC Annual Report and Accounts for the period ended 3 April 2015
A unique product and service offer for motorists, cyclists and families which provides an unmatched combination of service, convenience and range.
Helping and inspiring our customers with their life on the move.
Supporting drivers of Every Car
Inspiring cyclists of Every Age
Equipping families for their Leisure Time
1 As at 3 April 2015
Our strategic relationships drive our ability to deliver value. More broadly we source our products from suppliers around the world who manufacture products to our designs and rigid specifications. Our various brands, including 13, Apollo, Carrera and Boardman, are designed in-house and manufactured in factories in the Far East. Our Hong Kong office manages the production lead times and arranges shipments to the UK.
In both our Retail and Autocentres businesses we have a close relationship with parts factors, giving us on-demand access to thousands of car parts without having to hold them in stock.
IT systems are crucial to how we operate, both in-store and in the Support Centre. During the year we completed the upgrade of our core operating platform (SAP) and are ready to start programmes to save time in-store.
See the material issues identified by engaging our key partners under Material Issues
Our leading Auto and Cycling brands are sold across our 467 nationwide stores. Our 305 autocentres offer a full service, maintenance and repair service across all car marques. Within these establishments, our c.11,000 colleagues are face-to-face with our customers on a daily basis, allowing us to deliver the customer service we aspire to.
See what we are doing to support our colleagues in delivering this service under Retail Apprenticeship Scheme & Cycle Repair, 3-Gears Programme and Croydon concept centre & Autocentres apprentices
We are a cash generative business and have generated £66.4m of free cash flow in the year. We are well supported by our banking syndicate, having amended the debt facility during the year and extended to November 2019.
Chief Financial Officer's Review
We translate our category expertise to offer an unmatched range of products, all of which contribute to the Halfords brand.
Our stores generate profit from the combination of low-cost sourcing and supply chain coupled with our excellent marketing skills and national store network. In Autocentres, our structure allows us to offer a lower price than most franchised garages and a more comprehensive service than many independent garages can match.
Training and accreditation, such as our 3-Gears training programme, ensures that consistent product knowledge and service reaches our customers across all our locations.
3-Gears Case Study
Our internal operations draw from the best industry practice. Our retail operation sales plan is based on close attention to market demands. We source direct from global suppliers who manufacture products to our designs and rigid specifications. Our distribution team use their specialist knowledge to group and ship products in line with the sales plan.
Halfords are the nation's go-to retailer for cyclists and motorists. Our products and services are as relevant to our customers today as they were when we started out over 100 years ago. We are setting out to grow our business by attracting more customers, encouraging them to buy more products and services, and persuading them to visit our stores and autocentres more often. To do this we make four promises:
It is important to our growth plans that we offer prices our customers trust. We want our customers to feel they are getting value for money. We offer a number of bundled prices which mean none of the typical hidden costs that customers can encounter when, for example, having to buy the product then buy the fitting. More are to come.
Product quality is another important aspect of value for money. We want customers to have confidence that their purchases will last. In listening to our customers' feedback we have made changes to our products to help customers trust our quality.
Our smart category management ensures that we remain a natural destination for our customers by offering a range of products that suits their varied needs. Our range encompasses car parts, in-car technology, child seats, cycling, roof boxes, and outdoor leisure and camping equipment, with a combination of own brand and third party brands to meet customers' needs.
We have four objectives to continually improve the experience of our customers:
We want to create a compelling shopping experience that excites customers, improves their knowledge of our products and services, and engages them emotionally with our brand. Along with our retail stores and autocentres where we engage with customers face-to-face, we recognise it is crucial to build our digital channels so that we can fully engage with customers online. Our ambition is to create a service-led, fully integrated digital proposition which will maintain our ongoing relevance.
Our ability to offer a friendly and expertise-based service is fundamental to sustainable sales growth. We want customers to have a better experience at Halfords than they would at non-service based retailers. This will mean they are more likely to spend more with us and recommend us to their friends. Our Service Revolution will ensure customers are served by colleagues who are enthusiastic about their role at Halfords and the products and services we offer. With stores less than a 20 mile drive away for 90% of the UK's population, we are well-placed to foster convenient and close customer relationships.
See how developing our customer relationships is a material issue under Material Issues
Through our core categories of Car Maintenance, Car Enhancement and Car Servicing, we provide services and expertise to take the hassle out of motoring.
Thanks to our scale, positioning and the successful extension of our ranges into the premium segment of the cycling market, we are the biggest player in cycling retail.
Our camping and outdoor leisure ranges make up the smallest element of our retail sales, spread across several fragmented markets.