Olympics cycling success and new boss lift Halfords

By ERIKKA ASKELAND
Published on 04/10/2012 19:44

BRITAIN’S cycling success in the London Olympic Games and the Tour de France shifted bicycle sales into a higher gear, helping retailer Halfords Group recover some ground lost in the spring.

Halfords, which sells transport and leisure accessories,, yesterday said bike sales have surged since Bradley Wiggins became the first Briton to win the Tour de France and Sir Chris Hoy and Victoria Pendleton helped the country win multiple gold medals at the Olympics.

Sales of bikes and cycling accessories grew 14.7 per cent in the quarter to 28 September,

giving the struggling retailer a shot in the arm after poor weather in the previous quarter had caused sales to slump dramatically.

Commercial director Paul McClenaghan said: “We were particularly pleased with sales of our Pendleton and Boardman bikes. Both are designed by Olympic gold medalists and the range has resonated strongly with customers during the period.”

By contrast, the wettest April and June since records began drove first quarter sales down 9.6 per cent. Halfords, like many British retailers has been hit hard by the recession and a profit warning in July effectively cost the job of chief executive David Wild.

On Wednesday the retailer unveiled his replacement, Matt Davies, who joined the company with immediate effect.

Seymour Pierce’s retail analyst Kate Calvert hailed the arrival of Davies, previously boss of pets retailer Pets at Home.

She said it was an “excellent” appointment, given the reputation for service at Pets at Home and the growth of the business from 140 to more than 300 stores under his tenure.

Panmure Gordon analysts said the company had gone from reverse to full steam ahead in one quarter.

“While perhaps some of the improvement is a one-off, the new chief executive has a stronger platform than he might have expected as he starts his first day,” they said.

Despite the good news, the company remains cautious given a difficult economic outlook.

Dennis Millard, chairman of Halfords, said: “Our second-half planning assumptions remain cautious given the prevailing pressures on the consumer as

we approach the important winter and Christmas trading periods.”

Second-quarter like-for-like sales at its retail business were up 4.6 per cent, while they rose 12.4 per cent at its Autocentres car servicing operation, which it said was the strongest growth since it acquired the business in 2010.

Overall, Halfords’ sales in the first half of the year were 0.4 per cent higher.

The company, which trades from about 460 Halfords stores and 260 Autocentres, said that, given the recovery in sales, it expected first-half pre-tax profit to be £40-42 million.

Millard said the group’s full-year pre-tax profit would now be in the upper half of the previously-stated range of £62-70m, but below the £92.2m it posted for the year to March 2012.