Halfords UK Post Flat Annual Cycle Sales with Market Share Growth
REDDITCH, UK – Annual bicycle revenues at cycle market leader Halfords for the year to April 2016 declined by 1% compared to the previous year. Halfords total pre-tax profits fell 1.2% to GBP 80 million (€ 103m) over the same period. Halfords are also a major presence in the car parts and maintenance and outdoor leisure markets and the results did show some strong growth in specific car part related sales.
However, based on their own research of the UK cycle market, Halfords CEO Jill McDonald claimed to have increased their market share, which is said to stand at around a quarter of the market, though McDonald recognised that, in general, data on the UK cycle market is ‘difficult to come by.’
Analysts reactions were mixed:
“With a 24% market share in cycling, and leadership in many of its markets, you would expect Halfords to be generating better than what they describe as a solid performance,” commented George Lansdown, equity analyst at Hargreaves Lansdown.
In contrast Kate Calvert of retail analyst Investec described the results as “a solid full-year performance, 2% ahead of consensus, despite much activity implementing a new strategy and unhelpful weather.”
Future growth prospects
Halfords still have many irons in the fire when it comes to future growth prospects. They recently acquired online retail specialists Wheelies and Tredz, giving them access to premium brands like Cube, Giant and Specialzed.
And with the Rio Olympics fast approaching they have announced that Olympian Laura Trott is behind the latest performance cyclist endorsed range. It will consist of a hybrid and 3 road bikes.
Rapid expansion of Cycle Republic
Perhaps most promisingly of all, Halford’s high street brand of shops, Cycle Republic, showed rapid expansion in 2015. Halford’s boss McDonald clearly thinks that the UK bike industry’s search for new customers may lie in city cycling, despite the fact the UK market has traditionally been dominated by competitive minded road cyclists, stereotypically middle-aged males in lycra.
“If you walk around London, you can already see the investment the Government is making. This gives us confidence in the long-term outlook,” said McDonald. She may have been referring to the great recent improvements in London’s cycle infrastructure – long criticised by cycle campaigners but now starting to gain plaudits from them.