Following an outcry in the UK – led by the Association of Cycle Traders – the £10-to-assemble-your-Christmas-bike policy was dumped by Halfords.
But the very fact the policy was allowed to be promoted in the first place is cited by industry analysts as yet another example of how Halfords is appearing to put short-term, sell-the-company goals before any consideration of the long-term damage the company may be doing to itself.
Since being acquired from Boots The Chemist by private investment house CVC, Halfords has jettisoned marketing and bike sourcing staff; forced new and unwelcome payment terms on key suppliers; screened globally-criticised TV ads, starring chimps; attempted, but failed, to acquire rights to top-end bike brands; and is to promote sub-£79 bikes in the run-up to Christmas.
Merida, a major supplier to Halfords, producing many of the chain’s house-brand bikes, has just announced plans to market its own range of bikes. This decision cannot be definitively linked to the recent imposition of new payment terms and forceful request for extra margin because Merida UK won’t comment.
Sustrans has also recently distanced itself from Halfords. At a council meeting of the Bicycle Association, Sustrans execs put it on record that the charity wasn’t entirely happy with the way Halfords was using the soon-to-expire sponsorship of the Sustrans website as an example of how Halfords "supports" the world of cycling.
Halfords played the Sustrans card because the CVC-owned store group has refused to join the Bike Hub levy scheme, a cross-industry campaign to raise money to pay for the promotion of cycling.
The policy to charge customers £10 to assemble bikes can therefore be set against this background.
And Bike Europe’s editor in chief is scathing of the way Halfords appeared to be putting put profit before safety:
"The fact that Halfords UK is discounting prices for bikes when they are bought in a box instead of completely assembled by a (hopefully) skilled mechanic [is] an objectionable policy because bikes are not toys but mobility products that need to be safe to ride."
CVC execs – and Halfords corporate line swallowers – will no doubt believe their marketing, sourcing and staff jettisoning policies are bearing fruit because the company has, indeed, ramped up revenue, and has crowed about this to suppliers. However, what may be being overlooked by the execs is that the UK bike trade has just had one of the most successful years in the past ten and Halfords would have been awash with cash even if the stores had been staffed by real monkeys not just spoof ones.
It’s the long term damage to the Halfords brand that is of most concern to industry analysts, although that’s perhaps something that won’t be leading to sleepless nights for CVC execs.