Bike sales fail to lift Halfords

CAR parts and bicycle retailer Halfords has cheered soaring cycling sales during the coronavirus lockdown, but the boost was not enough to offset tumbling motoring revenues.

The group – which was classed as an essential retailer during the lockdown and was able to keep stores open – said like-for-like bike sales jumped 57.1 per cent in the 13 weeks to July 3 as Britons took to two wheels.

However, overall same-sales were dragged 6.5 per cent lower after it saw a 45.4 per cent plunge in motoring revenues over the lockdown quarter with fewer cars on the road. It said the motoring sales trend was improving as lockdown restrictions eased, with batteries and battery care products in high demand.

Graham Stapleton, chief executive of the business, told the PA news agency that the business is “accelerating” its plans to close up to 10 per cent of its physical sites, which include retail stores and garages. He said: “Up to a tenth of physical locations, so both garages and stores, could close this year.

“That will be between 50 and 60 sites, although all that depends on conversations with landlords, so this could be lower depending on talks with them over leases.”

It comes months after Halfords announced plans to shut its 22 Cycle Republic stores, with the loss of 226 jobs.

Full-year figures for the 52 weeks to April showed underlying pre-tax profits fell 4.9 per cent to £55.9million on revenues 0.3 per cent higher.

But shares were 6 per cent lower as the chain painted a gloomy picture for the year ahead with three possible profit scenarios, each pointing to sharply lower results.

It said it could slip to a £10million underlying pre-tax loss if sales fall 10.5 per cent for the rest of the current year and even in the best-case scenario, profits are likely to drop to between £10million and £20million.

The group is expecting sales to remain skewed towards bikes despite a pick-up in motoring, which has a knock-on effect on profits, given that cycle sales are lower margin.

‘Up to a tenth of physical locations could close this year’