UK retail group Halfords are to phase out their bicycle-only Bikehut and Cycle Republic stores due to a drop in sales.
The cycling and car maintenance side of the business has actually seen a small increase in like-for-like sales, but overall there has been a decline of 1.2 percent.
In a pre-close statement issued this morning, Halfords said they were continuing to expand their share of the cycling market, thanks to the success of their Boardman range and the government-backed Cycle2Work scheme.
They sold more than one million bicycles in 2008/09 for the second consecutive year – one in three of all new bikes bought in the UK.
But the company said they no longer believed that stand-alone cycle stores would "deliver the absolute levels of financial return demanded of Halfords' investments".
The statement said: "Ranges currently only available in stand-alone stores are therefore being transferred to our superstore chain and Bikehut and Cycle Republic stores are being re-branded, where appropriate, to a full Halfords offer via the Metro format."
Last year Halfords sold 34,000 bikes through the Cycle2Work scheme, which enables employees to buy a bike tax-free in 12 monthly instalments. That's almost 50 percent more than in 2007/08. This was in sharp contrast to new car sales, which fell 11 percent in 2008. Halfords has now sold more than 80,000 Cycle2Work bikes since the scheme was introduced in 2005.
David Wild, Halfords’ chief executive, said: “We are delighted with the strength of our bike sales in these tough times on the high street. The tax benefits of the Cycle2Work scheme mean customers are able to buy higher specification bikes and we have been particularly pleased with sales of our award-winning Boardman bike range, designed in partnership with Olympic champion Chris Boardman.
“It was a great achievement when one of Halfords’ Boardman bikes was ridden to Olympic victory by Nicole Cooke in Beijing last year and sales of the Boardman range are now exceeding established premium brands.
"We remain committed to supporting cycling through our partnership with British Cycling in 2009 and the sponsorship of the road race Premier Calendar series. We are also in our second year of pro team sponsorship supporting many aspiring 2012 cyclists.
"Cycling is undergoing a renaissance in Britain thanks in no small part to Team GB’s outstanding Olympic success and we are delighted to be part of it.”