Soggy summer punctures cycle sales at Halfords
|
Version 0 of 1. Halfords’ impressive cycling breakaway has come to a halt as the company reported a slowdown in sales and blamed bad weather for keeping casual riders off the road. Its new chief executive, Jill McDonald, said cycling sales in the past eight weeks had collapsed by 11 per cent compared with the same period last year, but she claimed the problem was a “blip” that could be reversed. She added that initiatives such as the cycle superhighway being built through central London, and more cycle lanes across the capital, should help, but shareholders were unimpressed and the group’s shares fell 8.5 per cent to close at 466.2p. Ms McDonald said: “We’ve had a blip over the summer on bikes. I hate blaming weather but it has been a factor. It’s been wetter and cooler this year which has deterred the more casual cyclists. “The Tour de France started in the UK last year, which also helped us. It didn’t this year and as a result there wasn’t the same buzz. We’ve also seen greater levels of discounting from competitors, which we matched. But if I think of the opportunities of commuting in London, infrastructure investment, and the opportunities look good.” Halfords sold 225,000 bikes in the eight weeks to 28 August, 18,000 fewer than in the same period last year, although that included more premium cycles than last year. Ms McDonald insisted that profits would remain “broadly in line” with analysts’ expectations of £86.6m, but explained that the unexpected announcement was because the company would not report again until November. “We just felt it was too long to be sitting on this information,” she said. The fall means that the retailer’s overall sales were down by 1.3 per cent compared with a year ago. The drop in cycles was countered up by strong growth in its car maintenance division, up 7.3 per cent, and car enhancement, up 4.7 per cent. Halfords’ Autocentre servicing and repairs business is expected to help maintain profits because of the high margins charged in the car repair industry. Ms McDonald, who took over in May, said she would unveil a more detailed analysis of what Halfords should do next as she got to grips with the company. But she did say that the children’s bicycle division would be overhauled in time for Christmas, with more themed bikes to tie in with popular franchises such as the upcoming Star Wars film, Disney’s Minions and Frozen. |