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July 10, 2013 4:39 pm
Cycle sales powered ahead at Halfords, but the retailer said it would struggle to match its performance from last summer when the Olympics triggered a cycling bonanza in the UK.
“It’s going to be really tough,” said Matt Davies chief executive, who launched a turnround strategy at the bicycle and car repairs group this year.
After poor performance in the same quarter last year, better weather this year helped sales in the cycling division to jump 15.5 per cent year on year for the 13 weeks to June 28.
While there are no Olympics this year, the strong performance of Chris Froome so far in this year’s Tour de France has helped Britain to keep up some of its recently acquired obsession with cycling. “You can tangibly feel the excitement surrounding the Tour de France,” said Mr Davies.
Sales of some of Halfords’ top-of-the range bikes jumped, with sales of its Boardman brand up 22 per cent. Sales of its Pendleton brand bikes jumped more than two-thirds. Total like-for-like retail sales jumped 8.8 per cent – well above the 3.2 per cent gain forecast by analysts.
Across the group like-for-like sales rose 7.5 per cent. The strong performance in retail, however, was not matched by the Autocentre division, which struggled to maintain market share. Like-for-like revenues in the division fell 0.9 per cent, with fleet sales hit especially hard, falling 8.5 per cent.
The better start to the year than expected sent the shares up 12.6 per cent to 358.4p in afternoon trading.
Investor reaction to the turnround plan in May had been mixed and Halford shares dropped almost a fifth on the day as the group slashed its dividend to pump cash into stores and on staff training. Mr Davies, who joined from Pets At Home last year, said the big shareholders had “huge support” for the plan.
The turnround will focus on mopping up the custom of occasional and hobby cyclists, leaving the more dedicated riders to higher-end specialists, such as Wiggle.
“We still have to work to make sure that the ‘Sunday cyclist’ comes to Halfords,” said Mr Davies. “If you’re a serious cycle club member, it’s hard for us to compete.”
Online sales rose 15.5 per cent, as the group tried to maintain market share in the face of non-specialist retailers such as Amazon.
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