British auto parts to bikes retailer Halfords said a recent boom in bicycle sales had fallen off sharply in its second quarter. Halfords explained: “The disappointing Cycling performance was primarily driven by mainstream bikes, as well as associated parts and accessories”. It considers this to be principally market-driven, reflecting greater levels of discounting as well as poor weather deterring casual cyclists.
But Halfords said sales of its “premium’ bikes were still doing well and it was the lower end of its range that was underperforming”.
New chief executive Jill McDonald, who joined from fast-food chain McDonald’s in May, admitted the sales were disappointing but described it as a “blip”.
“Looking further ahead, we have an exciting pipeline of innovation for bikes and accessories and we remain confident in the medium and long-term growth opportunities in the cycling market”.
Halfords saw an 11 per cent like-for-like revenue fall in cycling in Q2. cycle fix like-for-like remained strong at +27.6 per cent, which may make for uncomfortable reading for the many IBDs relying on servicing for revenue – or may indicate that new bike sales have declined in favour of maintaining existing bikes.
Despite this, the final results are as glum as the weather, with overall same store sales down 1.3% in the eight weeks from July 4th to August 28th.
“This recent weakness in our cycling sales is disappointing, but it comes after two years of very strong growth in the category and has been partly offset by strong growth in both auto maintenance and vehicle Enhancement sales”, she said.
Halfords said retail trading elsewhere, particularly in auto maintenance, had been strong and that improved profitability and cost control meant full-year group pretax profit would be broadly in line with market expectations.
“We issued this trading update because cycling has been a little bit weaker than expected”, McDonald is reported as saying in the Guardian.