Halfords Christmas Figures Are Flat, As Cycle Sales And Car Seats Falter

Halfords Sees Its Post-Olympic Glow Fade As It Reports Flat Christmas Figures

Car and bike retailer Halfords' post-Olympic cycling bubble has burst, with the brief boost in cycle sales seeming to be at an end.

Retail like-for-likes were up 0.4% while across the group they edged up 1% over the the 15 weeks to 11 January.

Although Christmas sales helped to buck the trend, Halfords was forced to admit that for the majority of the 15 weeks looked at in its interim statement, cycling sales were "weak".

Travel solution like-for-likes also dropped 8.2%, with less child car seats sold over the Christmas period.

More positively, car maintenance and parts sales were up 13.2%. Car enhancement products also performed better, thanks to improved marketing and a stronger range in both Audio and Sat-Nav.

Matt Davies, chief executive, said in a statement on Tuesday that he was particularly pleased with the growth achieved in the service-led retail sector, especially within car maintenance.

"Cycling sales initially disappointed but performed more strongly as the holiday period progressed and we were particularly pleased that momentum has been maintained in sales of Premium Cycles," he continued.

"Autocentres revenue continues to grow as we focused investment on the new-centre opening programme, capacity for future growth and motorists' awareness of the brand.

"We aim to improve significantly the Halfords customer experience and develop category opportunities where our brand is under-represented in areas such as Cycling Parts, Accessories and Clothing; we are on track to deliver this expanded offer in the next financial year. Together with this and a number of other initiatives outlined earlier in the year, we aim to drive sustainable revenue growth and deliver value for our shareholders."

Company Watch's business analyst Nick Hood told the Huffington Post: "Mixed Christmas sales numbers from Halfords show yet again the challenges facing specialist retailers. Coming on the same day as HMV finally succumbs and a week after the demise of Jessops, the collapse of the brief Wiggo cycling bubble has hit overall performance hard despite the better outcome on car maintenance.

"Yet again we see a retailer with a heavy heritage burden of physical stores struggling simply to tread water in a world where online activity is increasing exponentially. The added problem for Halfords is a weak balance sheet with negative working capital, high inventory levels and huge intangible assets, which has kept it in our warning area since 2011. This is hardly the ideal financial platform on which to battle through these tough economic times."