Bicycle boom helps push up sales at Halfords
Nation's biggest bike retailer
Halfords, Britain’s biggest bicycle retailer, has revealed a near 4% increase in sales in the six months to 2 October 2009, and although specific figures aren’t available, the signs are that bike sales have made a big contribution to growth.
In its interim results statement this morning, the company said that sales for the period were £425.1 million, a 3.8% increase on the comparable period in 2008. On a like-for-like basis, which ignores the impact of new store openings, sales rose 1.7%. Operating profit was 12.9% higher at £62.0 million, and pre-tax profit jumped 24.0% to £60.9 million.
Those figures, which encompass Halfords’ operations in the UK, where 440 of its 469 stores are located, the Republic of Ireland and Central Europe, mask different performances from its two main divisions here, car enhancement and leisure, which includes camping and cycling.
Although the company doesn’t split sales between those two broad product areas, its acknowledgment that sales of the latter have been beyond expectations suggests that their contribution to turnover growth is beyond the 1.7% like-for-like increase seen across the group as a whole.
That interpretation is further supported by its admission that operations in Europe have suffered due to the economy and falling UK sales of satellite navigation products, previously an important driver of growth, due to a combination of the market reaching saturation and consumers avoiding big-ticket car electronics purchases. The clear inference to be drawn is that bicycles will have been responsible for picking up much of the slack.
According to the specialist retail website ActSmart, the independent bike shop sector achieved sales growth of 4% in the same period, although it points out that Halford’s strength in provision of bicycles under the booming Cycle2Work scheme skews the picture somewhat.
Halfords said that in bicycles, the market was still in growth, “benefiting from a combination of leisure, environmental, fitness and economic drivers, all of which we believe to be sustainable.” It added that it had enjoyed particular success in grown sales of its Bike Care service plan, saying that the option was taken up by purchasers of around 20% of the 1 million bikes it sells each year.
The Worcestershire-based company says that its sells one in three mainstream adult bicycles in the UK, and has been targeting other areas where it is under-represented, most visibly through the Boardman brand in the premium sector, which the company claims is the fastest growing make in that part of the market.
The company has the exclusive rights to distribute the Boardman brand in Britain, and says that it has sold three times as many of the bikes as it did in the comparable period last year, and that the bicycles pull in five times the company’s average transaction value.
It is now working on using the credentials of the former World and Olympic champion’s brand, ridden to gold medal success last year in Beijing by Nicole Cooke, to broaden its premium offer, although earlier this year its ambitions in that area took a hit when it said it was pulling the plug on Bikehut, its dedicated cycling fascia.
That decision was reportedly due to problems in attracting high-end brands to sell alongside its other ranges, and almost all the stores have now been converted back to the Halfords brand.
The company is also beefing up its accessory range, both in-store and online, and also plans to focus on ranging at individual stores to enable it to serve local demand in areas such as town and trail bikes, folding bicycles, and performance hybrids.