Profits are up 20 percent at UK retail chain Halfords, thanks largely to soaring cycle sales.
"Excellent" performance in the group's Leisure business, which covers cycling and camping, helped contribute to a like-for-like sales increase of 1.7 percent across the business in the six months to 2 October 2009.
Revenue was up 3.8 percent at £425.1 million and pre-tax profits were £60.9m. However, the group's decision to abandon its stand-alone cycle stores cost it £1.2m.
Chief executive David Wild said cycle sales had "exceeded expectations" and helped compensate for "the economic headwinds experienced in our international markets and the decline in the satellite navigation sector".
"In our Leisure category, the cycle market continues to grow benefiting from a combination of leisure, environmental, fitness and economic drivers, all of which we believe to be sustainable," he said. "Halfords retains its clear market leadership position."
Mr Wild went on to say that the group had increased sales of Bike Care Plan repair warranties and now supply them with 20 percent of the one million cycles they sell annually. Halfords have a strong hold on the mainstream adult cycling market – where they sell one in three new bikes bought in the UK – and are trying to increase market share in other areas.
"Within the premium cycle sector, our exclusive Boardman range has become the fastest growing brand," said Mr Wild. "In children’s cycles, further extensions in licensed cycles and accessories have maintained the encouraging rate of sales growth achieved in the second half of the previous year."
In the year to come, Halfords plan to reduce costs through "operating efficiencies", open more stores and a massive new 320,000sq ft distribution centre near Coventry, and add 2,000 more cycle accessories to their website, www.halfords.com.