Cycling sales boom at Halfords as retailer posts interim results

Growth due to better weather this spring and summer and continued British success

by Simon_MacMichael   November 7, 2013  

Halfords barrier logo 3x2 (copyright Simon MacMichael)

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.

12 user comments

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Might buy an Apollo, the car might come off 2nd best.

posted by Leodis [164 posts]
7th November 2013 - 14:19

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Leodis wrote:
Might buy an Apollo, the car might come off 2nd best.

yep this might backfire. If tens of thousands of people think riding an Apollo is what cycling feels like they might give up.

I did hear though that the Victoria Pendleton range of bikes had a lot to do with this boom. Kinda like Pashley but cheaper.

Cycling is like a church - many attend, but few understand.

posted by oozaveared [496 posts]
7th November 2013 - 14:29

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Picking up my new CX last night the guy in the shop was saying the new Boardman '14 range was selling strongly too, so it should continue.

Boardman CX Team '14 | Cannondale CAAD8 '12 (written off, SMIDSY) | Scott Sportster '08

Gizmo_'s picture

posted by Gizmo_ [712 posts]
7th November 2013 - 15:07

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fFunny, what they report to press and what comes out of their boardroom differs somewhat, canning a load of medium to high end cycle brands and scaling back in-store offering is on the cards for them.

Sounds exactly what happened when they jumped on the mtb boom 10 years ago, shout lots about it, get a load of brands in and then a year later decide its not worth it & kill the project...

posted by sethpistol [29 posts]
7th November 2013 - 16:05

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great to see companies benefiting by investing in cycling

posted by jarredscycling [436 posts]
7th November 2013 - 18:46

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Gizmo_ wrote:
Picking up my new CX last night the guy in the shop was saying the new Boardman '14 range was selling strongly too, so it should continue.

Picked a CX recently myself
Sadly as is often reported the build quality was poor
from minor things such as a front shifter not shifting to a headset with absolutely no grease!

posted by Elcustardo [8 posts]
7th November 2013 - 19:30

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Take a close look at their current half price kids bikes TV ad - the largest bike has been built with the forks on backward. Really.

posted by psclarke [10 posts]
7th November 2013 - 19:42

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I was after the new BMC 105 hybrid for £1250, the boardman hybrid bike pro 2014 has a great spec (worse brakes) for £999 no doubt get some discount as well.

posted by Leodis [164 posts]
7th November 2013 - 21:23

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I worked in various Halfords stores as a 6th-former and Uni student 10-15 years ago. Halfords were just starting to get a good range of bikes in (GT, Voodoo) and their own "premium" offerings (Carrera, Real) were quite credible at the time. We were also able to get hold of Pace, Hope and almost any other desirable brands at competitive prices.

The service from the shops was highly variable though; perhaps as it is now, based on reading around forums. In my time, you either got a bike nut like me or a numpty from the motoring side of the shop.

At times, we were encouraged to offer bikes just boxed to customers, complete with a "tool kit" (piece of metal with spanner holes stamped into it). You may know that bikes tend to come with forks reversed when packaged from the factory and, for the reason above, I think this is why you see so many people riding with them like this - they don't know that you need to twist them 180 degrees.

You have to remember that Halfords is what Debenhams or Currys are to their respective sectors. I still think they're streets ahead of the likes of Motaman or Argos for cycles.

Find a good store, with good staff; and Halfords take some beating as a package for the Everyman cyclist (with some bargains, too, for the rarified road.cc reader). Just be careful to spot the bad ones...

posted by BenH [7 posts]
8th November 2013 - 10:28

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BenH wrote:
I worked in various Halfords stores as a 6th-former and Uni student 10-15 years ago. Halfords were just starting to get a good range of bikes in (GT, Voodoo) and their own "premium" offerings (Carrera, Real) were quite credible at the time. We were also able to get hold of Pace, Hope and almost any other desirable brands at competitive prices.

The service from the shops was highly variable though; perhaps as it is now, based on reading around forums. In my time, you either got a bike nut like me or a numpty from the motoring side of the shop.

At times, we were encouraged to offer bikes just boxed to customers, complete with a "tool kit" (piece of metal with spanner holes stamped into it). You may know that bikes tend to come with forks reversed when packaged from the factory and, for the reason above, I think this is why you see so many people riding with them like this - they don't know that you need to twist them 180 degrees.

You have to remember that Halfords is what Debenhams or Currys are to their respective sectors. I still think they're streets ahead of the likes of Motaman or Argos for cycles.

Find a good store, with good staff; and Halfords take some beating as a package for the Everyman cyclist (with some bargains, too, for the rarified road.cc reader). Just be careful to spot the bad ones...

Easier said than done

posted by festival [101 posts]
8th November 2013 - 12:49

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Its very easy to scoff at Halfords - but they do offer a reasonable service and stock parts which "real snob cyclists" use. I reckon they are on the up and are way better than certain other warehouse cycle shops… Costco/Makro et al

posted by Trull [54 posts]
8th November 2013 - 20:45

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One innovation they might like to try is called "answering the phone" -I tried 10 times today without success. I will still buy from them because the product is good, but standard of service can be shocking.

Pastaman

posted by pastaman [205 posts]
8th November 2013 - 21:28

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