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news
Halfords barrier logo 3x2 (copyright Simon MacMichael)Halfords issues profit warning as sales of adult bikes drop
Halfords, the UK’s biggest cycling retailer, has issued a profit warning, blaming “exceptionally mild weather” and says that weak consumer confidence caused sales of adult bikes to fall in the 14 weeks to 4 January, which includes the key Christmas trading period.
Total group revenue at the car parts to cycling retailer fell 2 per cent during the period, which corresponds to the third quarter of the company’s 2018/19 financial year, and for the first three quarters of the period stands just 0.6 per cent ahead of last year.
On a like-for-like basis, which excludes changes in the company’s store portfolio, cycling revenue was down 0.3 per cent for the quarter compared to growth of 8 per cent for the equivalent period a year earliier, but is 0.5 per cent up for the first nine months of the current financial year.
The Worcestershire-based company said that during the 14-week period, “Growth in cycle accessories and children's cycling was offset by a decline in the more discretionary and bigger-ticket adult bikes.”
The company’s shares plunged more than 20 per cent today as it downgraded its expectations of underlying profit before tax for 2018/19 to between £58 million to £62 million, adding that it expected consumer confidence to remain fragile into 2020 and anticipates profit for the next financial year to be in a similar range.
Halfords’ chief executive officer, Graham Stapleton, said: "This has been a challenging third quarter for the business, driven by exceptionally mild weather and ongoing weak consumer confidence. Together, these factors have led us to reduce our profit expectations.
“Whilst this has been a difficult period, we have managed costs and margin well and our free cash flow remains strong. Halfords is a robust business and we firmly believe that the strategy we outlined in September is the right direction for the business."
The company claims to have 19 per cent share of the £2 billion UK cycling market, and besides trading from more than 450 stores in the UK and Republic of Ireland and through its website also owns the 20-strong Cycle Republic chain and online retailer Tredz.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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15 comments
halfords gets a lot of stick but it will be missed if it dissapears.The cycle snobs may not like it but at least halfords trys to support cycling through its BC discount
Just another symptom of the death of high street retail. Soon to go the way of Woolies and Maplin.
The interweb is my last resort, tbh - I showroom on Amazon, instead of the other way around (look on Amazon to see if I can find the thing I want, then try and find it in a physical shop to buy rather than just clicking 'Buy now'). I'm trying to work out what I'm going to do when the High Street shops have all closed and its just charity shop - Starbucks - betting shop - Costa - charity shop...
Probably go for a ride.
Clearly you'll be purchasing your bike bits in the charity shop having paid over the odds for a paper cup of coffee and lost your bet on this year's Paris-Roubaix.
They don't advertise it, but can actually get you every single Shimano component and accessory, as they have an account with the distributor. You really have to ask them in store. They then price match to wiggle etc but then take off the British Cycling discount. So will actually be cheaper than anywhere else. But they don't even know things like what a Chainset is. It's a shame cos they would make a lot more money if people knew you could buy the full Shimano range from them. They should put the whole catalogue online.
Agree, I often find their stuff on ebay through their outlet store, hop onto the main site and get the CUK discount, plus I can buy ZEEk vouchers at another 6% off to pay for the goods plus use topcashback (which fund the zeek vouchers), I bought two pair of M530 pedals last year and net cost was £32.80!
They are fuckwits of the greatest order in my experience. 3 times in a row I ordered stuff online to collect and 3 times they screwed up. Items had either been sold to someone else when I got there or had been miscounted in stock in the first place. Luckily I managed to actually upgrade for the original price on one of them as an apology.
Once I went in asking for a quill stem adapter and the 'mechanic' there didn't have a clue what I was on about. I won't think he even knew that anything other than a-head existed. It funny going in just to listen to their sales bullshit sometimes, as some poor clueless sap takes in all the rubbish they're spouting about bikes.
Never had any problem with click and collect from my local Halfords, apart from one occassion where the item had been put in the wrong cupboard and it took them a while to find it - it was quite a small item, a micro SD card. They were/are cheaper than anywhere else for them.
I agree the mechanics are a bit hit and miss - there was one that really seemed to know his stuff, but he's vanished. The current crop seem to be trying, but have a way to go. They are young and inexperienced and need help, the same as you or I to start with - doesn't excuse them from making it up when they'd be better off admitting they don't know, though.
Bulshit! I was planning to buy a childs bike for Christmas, it was around £140 most of the year, when sales before Christmas were announced I found £160 (discounted from £200) on the price tag
Liars!
So went for a used one from ebay.
Whither Halfords? An whether the mild weather will wither this biking bellwether - anonymous.
If only the government would do something to encourage cycling, like making it safer. Halfords may not be my most favourite bike shop, but they are a bellweather for the industry, and any fall in cycle sales or any indication of falling cycling levels will be used by the petrolheads to deny that it is popular and deserves funding.
A strict liability law would help a lot for that. Expect the howls of gammon from across the land were any politician to suggest it though...
They need bad weather for the car side of their business. De icer, anti freeze, car care products etc. It is much bigger than the cycling side.
I should have read the whole thing, absolutely the car sales are ofsetting anything bike...
""The Worcestershire-based company said that during the 14-week period, “Growth in cycle accessories and children's cycling was offset by a decline in the more discretionary and bigger-ticket adult bikes.”!
I wonder with this bit though, where they think their USP is in the adult bike market? Boardman's used to be a lot of kit for their money and C2W schemes would help, however a lot of floor space is still dedicated to shite... Is the market declining as the post 2012 has flattened off or are we all at Planet X, Ribble etc.
Doesn't mild weather encourage further cycling leading to greater sales, repairs et al. Ok, so the sales of winter jackets, waterproofs et al may be later but I'd wager that those sales have simply gone elsewhere (much like many of your click and collect items)...