Halfords Group saw its cycling retail sales increase by 4.6 percent on a same-store basis in the first half of its financial year to Sept. 30. The group's total cycling revenues were up by 15.4 percent. Cycling sales were boosted by the launch of Cycle Republic and the acquisition in May of Tredz and Wheelies, two online retailers, which both enjoyed a 25 percent sales increase since the deal. In addition, the peak summer period benefited from warmer weather as well as the success of Team GB at the Rio Olympics, the company said.
Halfords mainly operates in the motoring and cycling markets. Around 70 percent of the group sales are generated from products and services related to motoring while the remaining 30 percent comes from cycling. The group's total sales in the 26 weeks to Sept. 30 increased by 6.3 percent to £567.3 million (€663.7m-$704.0m). Group earnings before finance costs, tax and non-recurring items (Ebit) were £41.8 million (€48.9m-$51.9m) as compared to £47.9 million in the first half of the previous financial year. Ebitda were down by 8.3 percent to £57.1 million (€66.8m-$70.8m). These drops were related to the depreciation of the pound sterling because of Brexit. The gross margin of 50.0 percent compares with 52.3 percent in the first half of the prior year.
The cycling business registered a strong performance during the summer, which more than offset the weather-impacted soft market conditions in April to June. Sales were driven by new ranges of kids' and mainstream bikes, continued strong growth in premium bikes and a “20 percent off all bikes” promotion. The positive momentum for cycling sales then continued beyond the end of the promotion into the autumn, with a 16 percent increase in the final six weeks of the half-year period.
The Cycle Republic stores that have been open for 12 months or more, posted strong double-digit growth on a same-store basis, while online sales have been building since the launch of the e-commerce website in August. Tredz and Wheelies, which were acquired in May, delivered a 25 percent sales growth on an annualized basis since the acquisition.
The network of physical stores proved important also for online sales, as 88 percent of the online orders from Halfords.com and Cyclerepublic.com during the period were collected in store.