Halfords’ major tyre retail play
The last few weeks have seen well-known automotive retailer and autocentre owner Halfords Group make a major move into the tyre retail space. Of course, this is nothing new, the company has been travelling towards tyre retail for about a decade. The last push of this scale was in February 2010 when the company bought Nationwide Autocentres for £73 million – a move that was laden with history of its own.
What’s most interesting about, the recent acquisitions of Tyres on the Drive and then McConechy’s is that they show just how close the company is getting to offering a fully integrated top-flight tyre retail proposition. Indeed, Tyres & Accessories estimates that the post-merger Halfords Autocentres operation will be the second largest tyre retail business in the country (see table).
But when you consider that Halford’s Ultimate goal is to run “550 garages and 200 mobile vans”, the business’ current position of second place isn’t good enough. Moving forward, Halford is clearly pushing to compete at the top of the UK tyre retail table. Again, this isn’t unprecedented. Halfords said it was aiming for 440 branches back in 2010.
And, all of this is apparently inspiring shareholder confidence, with JP Morgan Cazenove suggesting that Halfords Group plc shares have 11.3 per cent potential upside the day after the McConechy’s acquisition was announced. In an investor’s note dated 8 November, JP Morgan Cazenove noted Halfords Group plc shares as ‘Reiterates’, with the recommendation being set at ‘neutral’.
Draft UK tyre retail top 5 2020
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Sources: T&A Research; Company information