Bike retailer Halfords has bought online retailer Tredz and its sister company Wheelies, which started as one small Swansea bike shop back in 1989.
The deal is valued at £18.4m and is expected to drive long-term growth for Halfords, which saw its cycling sales fall slightly last year after a wet summer and tough competition from online rivals.
Business as usual
The move is expected to ‘build greater credibility’ in the premium end of the market: Bloomberg
However, this doesn’t mean Halfords is going to start selling the premium brands like Cannondale, Specialized or Giant bikes that Tredz stocks: the businesses will continue to be run separately, say both parties.
“For Tredz customers, they won’t notice any difference, it will continue on a standalone basis,” a Halfords spokesperson told BikeRadar. “It doesn’t make a huge difference for Halfords customers either.”
What it does mean is that Halfords now has a considerable new online retail arm: Tredz generated sales of £32m last year, and a healthy profit of £2.4m. Both Tredz and Wheelies will continue to be led by group managing director Keith Jones.
“It’s a great opportunity for us,” Jones said. “They’ll give us help with warehousing, which we need, along with back-end facilities. They’re a big group so there’ll be plenty of help.”
Halfords claims it holds around a quarter of the uk’s £2bn bike market: Immediate Media
Halfords claims that it has around 20-25% of the UK’s £2bn bike market, and annual sales across all divisions of around £1bn.
However, competition from massive online retailers is proving tough, and that’s likely to increase if the proposed merger between Wiggle and Chain Reaction Cycles gets approved by the Competition and Markets Authority (CMA).
“Tredz was an attractive acquisition in terms of their cashflow, and it builds greater credibility for Halfords group in the premium cycling market,” added the Halfords spokesperson.