Cycling sales boom at Halfords as retailer posts interim results

A strong performance in cycling thanks to better weather and continued British sporting success was the major contributor to car accessories and bike retailer Halfords seeing its turnover grow by 7.7 per cent to £490.6 million in the first half of its current financial year.

The results suggest that Worcestershire-based Halfords multimillion pound investment in cycling, announced earlier this year when it outlined a massive push in into the cycle clothing, parts and accessories market estimated to be worth £700 million annually is already starting to bear fruit.

The retailer said in May that it would be introducing thousands of product lines from premium brands including Lezyne, Craft, Gore, Oakley, Fizik and Brooks, available both in its shops and through its website, seeing it move into more direct competition with online businesses such as Wiggle and Chain Reaction Cycles.

In the 26 weeks to 27 September, group like-for-like sales – which strip out the impact of new or expanded stores – rose by 6.2 per cent, but in cycling the growth in revenue was 14.2 per cent.

Cycling accounted for 34.9 per cent of like-for-like retail sales during the period, up from 32.9 per cent a year earlier.

Elsewhere in the retail side of the business, which makes up 86 per cent of sales, car maintenance posted 8.8 per cent revenue growth, and there were also smaller sales gains of 2.1 per cent and 0.6 per cent in the car enhancement and travel solutions segments, respectively.

However, the Halfords Autocentres car servicing and repair operation continued to struggle, with like-for-like revenue down by 2.1 per cent including a deterioration during the latter three months of the period.

Thanks in part to that growth in cycling revenues, group pre-tax profits before underlying items rose 6.4 per cent to £44.6 million, the first growth in profit at Halfords for two and a half years.

Unsurprisingly, the focus of Halfords’ sales swings more towards cycling during the warmer months, and the company said that better weather in spring and summer 2013 compared to a year earlier had helped boost sales, as had continued British success.

The period also coincided with the launch of new bikes including one in the Pendleton range and a junior racing bike in the Carrera Zelos range, plus good sales of a Boardman carbon fibre road bike with a Cycle to Work scheme-friendly price tag of £1,000.

Marketing activity included 10 per cent discounts being offered on road bikes during the Tour de France – won by Team Sky’s Chris Froome – and the Prudential RideLondon Olympic legacy event.

During the summer, another initiative saw customers offered a 10 per cent discount on a new bike if they brought in their old one, with the latter donated by Halfords to the charity Re-Cycle. Around 5,000 bikes made their way to Africa as a result.

The school holidays saw around 10,000 children attend cycle repair workshops, and repair and maintenance is a growing part of Halfords business in cycling, in line with its long-term strategy.

Revenue in the Cycle Repair segment rose 27.7 per cent during the first half of the financial year, and totalled £4 million during the period. The company has also been partnering with events such as Sky Rides and the Deloitte Ride Across Britain to provide service assistance.

The company, which trades from more than 460 stores in the UK and Ireland plus 290 Autocentres, says that it wants to upgrade all of its in-store cycling departments within the next three years to provide more of an “upbeat” environment.

During the period under review, 100 stores received that treatment, including changing rooms being added for the first time.

It also highlighted last month’s announcement of the signing of a ten-year extension of its partnership with Boardman and the launch of the Boardman performance series, the relaunch of the Apollo range – which it says is the UK’s biggest-selling bike brand – and said that it will be launching a range of bikes for girls under the Pendleton brand.

Thanks in part to that growth in cycling revenues, group pre-tax profits before underlying items rose 6.4 per cent to £44.6 million, the first growth in profit at Halfords for two and a half years.