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Halfords, the struggling car parts and bicycle retailer, has parted company with David Wild, its chief executive of four years, as it warned on profits.
Mr Wild, a veteran of food retailer who pushed Halfords towards a greater focus on maintenance and other services, will leave with immediate effect, replaced by chairman Dennis Millard until a permanent successor is found.
His pay-off of £645,399 amounts to a year’s salary and benefits, and will be given in monthly instalments and subject to reductions should he take up a new position elsewhere.
All of Mr Wild’s share awards under long-term incentive schemes will lapse and the board has “not exercised any discretion to preserve these awards”.
“We sat down and agreed as a board that we needed a chief executive who could execute the strategy and bring the team and the whole organisation together to do so, and we felt that now was the right time,” said Mr Millard.
The company under Mr Wild had disappointed investors in recent years as it struggled to cope with soft consumer spending. Its market capitalisation has halved since mid-2010 and shares fell to new lows late last month on fears that the dividend was at risk.
“Its true that the businesses has not performed well recently, and so that is a contributing factor,” said Mr Millard.
Mr Wild said: “I think I have made a real difference at Halfords, and now is the right time to move on.”
Mr Millard reassured investors on Thursday that the company would pay the interim dividend but made no promises about a full-year payout.
Halfords is expected to look at internal candidates, and those outside of the company in the retail and services sectors, but it is most likely to choose an outsider.
Mr Wild joined Halfords in 2008 from a senior role at Walmart in the US, which in turn followed 18 years at Tesco. At Halfords, he oversaw the group’s expansion into, and subsequent withdrawal from, eastern Europe and in 2010 bought the auto repair company Nationwide Autocentres for £73m.
The company said on Thursday that like-for-like sales at its 260 autocentres rose 9.2 per cent in the first quarter, compared with a 7.5 per cent drop across the nearly 500-store retail chain.
Within the stores, like-for-like revenues from car maintenance rose slightly in the three months to late June but were offset by 10 per cent declines in bicycle sales and car “enhancement” products.
The company is now forecasting “continuing negative” like-for-like sales in the first half, and same-store sales that are flat at best in the second. Full-year pre-tax profit is expected to be between £62m and £70m, compared with analysts’ forecasts of £74m.
Philip Dorgan, an analyst with Panmure Gordon, said: “Many market commentators regard Halford’s problems as being in execution rather than structural.”
Shares in Halfords rose 10 per cent in early trading to 217.6p.