Coronavirus: Halfords outlines how hundreds of thousands of motorists could be affected if it shut

Tom Belger
Finance and policy reporter
A branch of Halfords in London, with the retailer continuing to trade. (Isabel Infantes/EMPICS Entertainment)

Halfords (HFD.L) has warned hundreds of thousands of people, including key workers, could be affected if it stopped trading because of the coronavirus pandemic.

Graham Stapleton, CEO of the car parts and bike retailer, said in a statement his company was facing an “unprecedented challenge,” and said the health and safety of staff and shoppers was its main priority.

But the company said in a statement on Wednesday it was determined to remain open, and had received government approval to do so as a provider of “essential services.” Its share price spiked after the announcement, up 10.7% in early trading.

Halfords, which has 446 branches and 369 garages, kept its garages and mobile van services running as normal, and plans “partial” store openings from later this week.

The company released figures to support its decision. It said its stores and garages carried out more than 350,000 motoring jobs a month, and its mobile vans carried out another 12,500 jobs at workplaces and homes.

The decision to remain open has sparked controversy however, with #boycottHalfords trending on Twitter amid concerns over staff's health. But many on social media defended the firm, highlighting its free car checks for NHS workers.

Read more: Shoppers warned food prices could rise despite fall in UK inflation

With many customers reliant on their cars, vans and bikes for work, Halfords said it had an “essential role to play in keeping the UK moving.” More than 50,000 vehicles with serious safety defects are fixed each month, and a further 200,000 bike jobs carried out, including both repairs and assembly for sale.

It did not release figures on key workers, but added: “Many key workers rely on us to keep their motor fleet running, including the Ministry of Defence, the British Transport Police and several large UK utility companies.”

The government’s order that all non-essential retailers must close has sparked debate and confusion over which services and workers should be regarded as essential.

Read more: Sports Direct U-turns on plan to open despite government lockdown

Sports Direct faced a backlash after it initially said it would remain open, saying it was vital for the nation’s health as people increasingly exercise at home.

Owner Frasers Group then reversed the decision and said both Sports Direct and Evans Cycles would close, but pointed out government rules allowed bike shops to continue to trade.

Halfords said it expected to take a £300m hit over the next year, with sales sliding 25% as shopper numbers decline. It plans to cut costs, including suspending £24m ($28.5m) of dividend payments in its financial year, deferring VAT payments and slashing capital spending by between £25m and £45m.

It said if stores and garages were closed, it will apply for government support on salary payments, suggesting some staff could be furloughed.

It said a government business-rate holiday would save its retail stores £26m a year.