- Halfords to accelerate the process of 60 store closures across the country amid the pandemic
- Last week, Halfords said its underlying cycling sales rose 57%, while sales in general rose 0.3%
- Halfords stock price is trading 5% higher today after losing over 20% last week
Shares of Halfords Group PLC (LON: HFD) have gained around 5% after British media outlets reported that the firm plans to close 60 stores, and not 6 as reported earlier this year. Halsford stock price has recovered a small portion of the last week’s losses.
Fundamental analysis: Halfords accelerates plans for store closures
The Telegraph reported yesterday that Halfords has drawn up plans to accelerate the process of store closures across the country. Accordingly, Halfords has designated 60 sites for closure, including garages and retail shops.
If true, this would mean that Halfords has increased the number of stores for closure by 10 times. Earlier this year, the retailer that sells car parts and tools, bikes, camping and touring equipment planned to close only 6 stores.
However, the COVID-19 outbreak has forced the company to significantly alter its original plans. Halfords is also looking to renegotiate store leases.
Last week, Invezz reported that Halfords’ underlying cycling sales came in 57.1% higher in the recent quarter. Overall, sales rose 0.3% to £1.14 billion for the fiscal year ending April 3.
Moreover, the retailer saw its online sales rose 200%, in addition to a 57% rise in cycling sales. The UK government recommended its residents to cycle to work amid the COVID-19 outbreak, helping Halfords’ sales to rise 26%.
“Having responded quickly and decisively to cater for the surge in popularity of cycling during lockdown, we are now seeing increased demand for motoring services and products as people start using their cars regularly again, having not done so for the last few months,” said chief executive Graham Stapleton.
Halfords said it expects a 9.5% decline in its comparable sales in fiscal 2020-21.
Technical analysis: Shares recover a portion of losses
Halfords share price has gained 5% today to trade just below the 145p mark. Still, these gains are comparably low given that the shares of Halfords plunged over 20% last week after the retailer sounded pessimistic about the profit outlook for this year.
Halfords stock price is now stuck between the 100-DMA and the 200-DMA. A break above the 200-DMA at 148p would allow the stock price return above the 150p handle and accelerate its recovery.
Halfords stock price rallied 5% today on reports that the firm plans to close 60 stores. The closure is expected to take place despite the surging sales that were reported last week.