Halfords slashes senior management bonuses after weak winter sales

The retailer’s boss Jill McDonald said it saved £2m – around half of total savings – by cutting bonuses in its third quarter after sales came in lower than forecast.

Around 1,000 head office staff in total were affected by the cut.

Earlier today Halfords reported flat like-for-like retail sales in the 15 weeks to January 15 , but maintained its full-year profits guidance. 

“We have reduced our bonuses in line with the performance which has led to cost improvement,” said McDonald.

Finance boss Jonny Mason said the bonus cut was a “response to lower volumes”.

He added: “In the third quarter we sold less winter-related product. That meant we needed fewer costs of distribution, fewer trucks and fewer hours in store.”

However McDonald told Retail Week there are “no plans at this stage” to cuts jobs or close stores as a result of cost pressures on the business.

Halfords revealed that its cycling division had returned to growth as like-for-likes rose 1.1% in the quarter.

McDonald said strongest growth had come from premium bikes, with sales “exceptional” as customers traded up from mainstream bikes. However cycling parts, accessories and clothing continued to decline.

Halfords also plans to launch a standalone website for its relaunched premium bike fascia Cycle Republic in the summer. McDonald said the site is being developed, but declined to give further detail.