Halfords enjoys Olympic bike boom, reveals size of cycling division's sales and market share
Strong second quarter sales growth thanks to Wiggins' TDF win and GB London 2012 success
Halfords, Britain’s biggest retailer of bikes and cycling accessories, has revealed that the success of Bradley Wiggins in the Tour de France and the country’s Olympic and Paralympic cyclists in London this summer helped fuel a 14.7 per cent rise in sales in its cycling division in the second quarter of its 2012/13 financial year.
The strong performance in the 13 weeks ended 28 September come after a 9.6 per cent drop in the first three months of the financial year, which the company attributed at the time to unseasonal weather conditions.
Chairman Dennis Millard said of the figures published today: “Our trading stance together with the actions we took to capitalise on a successful summer of sport and improved weather meant we delivered a stronger Retail top line in the period, recovering some of the ground lost in the Spring.
“Our second-half planning assumptions, however, remain cautious given the prevailing pressures on the consumer as we approach the important winter and Christmas trading periods.”
Prior to the current financial year, Halfords combined cycling and what it now terms “travel solutions” into a single “leisure” category. Now that those two categories have been split, for the first time we are able to get a true picture of the scale of its cycling business, which in the 2012 financial year achieved sales of £222.1 million, 29.5 per cent of the group total.
In an investor presentation published on its website today, Halfords says that it sees an opportunity to build further share of the buoyant cycling market, details of its cycling division accompanied by the strapline ‘Best cycle shop in town’ – perhaps more an aspiration rather than a statement of fact.
The company adds in the presentation that it controls 14 per cent of the bicycle market, with total market value put at around £615 million, and 5 per cent of what it calls the ‘cycle repair’ market – maintenance, presumably – which is valued at around £85 million.
The big gap between the two figures suggests that while many people may be happy to buy a bike at Halfords, they’re going elsewhere for maintenance, as well as perhaps reflecting the fact that compared to many independents, it perhaps attracts higher proportions of more casual cyclists who ride less frequently and whose bicycles need less maintenance.