08 June 2007 | Paul Snell
Retailer Halfords has increased its revenue by more than 8 per cent with the help of improvements to its supply chain.
Annual results released by the firm yesterday saw revenue grow to £681.7 million in 2006, an 8.5 per cent rise compared with the previous year. Pre-tax profit was also up 3.6 per cent, reaching £77 million.
The firm said its strong cost controls and improvements to its product sourcing had contributed to the rise. It said sourcing bikes from the Far East had led to lower prices and better buying margins. It added that direct sourcing teams, rather than buying though agents, had delivered tighter specifications and improved the quality of products.
The group said it was confident it would reach its target of directly sourcing 20 per cent of its products from overseas. It said a partnership with shipping firm Maersk Logistics had allowed it to consolidate deliveries from multiple suppliers in the region.
Halfords added that payment terms had been reduced from 53 days in 2005, to 49 days. It faced criticism over its lengthy payment terms for suppliers last year (News, 5 Jan 2006).
The firm also praised its delivery fleet outsourcing deal with DHL/Exel, tendered in 2006. It said there were immediate benefits from the deal, by improving the flow of stock to stores at peak times.