Halfords to open bicycle-only chain

Halfords, which sells one in three UK bicycles, is to tap into the cycling revolution on Britain's roads by launching a chain of dedicated bike shops under its Bikehut brand.

Aggressive expansion plans unveiled yesterday with flat full-year profits revealed the retailer is moving beyond the UK and Ireland for the first time, with stores in the Czech Republic.

It is following the supermarkets and opening smaller convenience, or "neighbourhood", stores in the UK. It has 10 smaller 5,000 sq ft stores so far and sees scope for a further 60. It will open 150 stores in the UK and Ireland in the next seven to eight years in addition to the 408 it currently has.

Ian McLeod, the chief executive, said Halfords was testing the eastern European market because there were plenty of old cars that needed spare parts, plus car ownership was high.

Last year, booming sales of in-car technologies hit profits because they are lower margin than products such as oil filters. Pre-tax profits rose 2 per cent to £77m after the gross margin fell by 260 basis points.

Mr McLeod said underlying sales had risen 3.2 per cent since the start of its new financial year, excluding the boost from Easter. He also announced plans to buy back £50m of shares over the next two years.