by After profits fell last year due to “significantly worse than expected” bike sales, Halfords’ leisure cycling sector has remained challenging in the first half of 2024 following the UK’s “wettest spring since 1986”.
However, in its trading update for the 26 weeks to the end of September, the major retailer, the largest provider of bike sales and services in the UK, said its performance cycling sector “continued to outperform” and that its new premium bike range was positively received by customers.
Halfords reported that the group’s total like-for-like sales remained “broadly flat” in the first half of 2024 (down 0.1 percent), compared to a strong performance last year, in which sales rose 8.3 percent.
Facing the UK’s wettest spring in 38 years, the company reported that its retail segment (which accounts for 60 per cent of the group’s total sales and covers both car and cycling) saw sales fall just 0.7 per cent was recorded.
While Halfords did not detail how this weak performance was spread across cycling and driving, it did reveal that its automotive products – which account for 80 per cent of all sales across the business – “proved more resilient than expected”.
However, recreational cycling remained “challenging”, the company said, “although our new premium cycle ranges were positively received”.
> “The premium sector is the fastest growing part of the cycling market”: Halfords is doubling the number of bikes in its range priced above £1,000
Last month, Halfords announced plans to significantly expand its premium bike range, with the aim of more than doubling its high-end offering.
The expansion includes the Carrera, Boardman and Voodoo brands, with top models priced at £3,800 and components including Shimano GRX Di2 and Zipp 303 S carbon wheels.
“The premium sector is the fastest growing part of the cycling market – and one that has been under-represented at Halfords,” the company said in September.
As this new range has been enthusiastically received by customers, Halfords’ performance cycling products are said to have “continued to outperform”, with online company Tredz increasing its sales compared to last year.
Meanwhile, the company noted that “high inflation in technician wages has persisted”, a factor that is particularly affecting Halfords’ automotive sector but has also had an impact on the cycle industry in recent years.
Overall, the brand says its outlook for the coming year remains “unchanged” and “uncertain,” but that its overall Team Sky-esque “control the controllable things” strategy is currently going according to plan.
“Although consumer sentiment is improving to some extent, the near-term outlook remains uncertain, particularly for large, discretionary purchases,” the report said.
“Our outlook for FY25 remains unchanged. In the second half of the year, our focus remains on optimizing our market-leading platform in the face of ongoing wage inflation and end-market volatility to position ourselves for future growth. Therefore, we prioritize investments where we have high confidence in strong short-term returns.”
> Bicycle market ‘significantly worse than expected’, warns Halfords – with ‘high-profile failure of Wiggle’ and widespread sales evidence of ‘another year of decline’
Commenting on his company’s latest financial report, Graham Stapleton, CEO of Halfords, said: “While consumers remain cautious about their discretionary spending, compounded by uncertainty over the content of the upcoming Autumn Budget, we have remained focused on controlling the controllable factors , and I am pleased with our performance in the first half of FY25.
“Our services and B2B-focused strategy has supported Halfords’ growth, despite two of our core markets remaining well below pre-Covid levels. This has enabled us to absorb more than £130 million of inflation since the 2020 financial year while maintaining a strong balance sheet.
“In this environment, we are focused on optimizing the existing platform to deliver near-term returns while accelerating our investment in the Fusion concept to position ourselves for growth in the coming years.”
In June, Stapleton acknowledged that bike sales were expected to continue to decline over the next 12 months, but concluded that the company was “well positioned for profitable growth going forward” given the company’s profitability at a time of significant headwinds.
Halfords also pointed to the cycling industry continuing to “rapidly consolidate” – pointing to the takeover of Wiggle by Mike Ashley’s Frasers Group, the retail group that already owns Evans Cycles and Sports Direct – as another reason why the cycling industry has become “more challenging and competitive” in recent months.
