Halfords has skilled “considerably worse than anticipated” efficiency within the biking market, and expects the scenario to say no additional for 2025, it has mentioned in its preliminary report for the 2024 monetary yr.
It additionally factors to Bicycle Affiliation figures that present a biking market that is still 30% down on pre-Covid ranges.
The most important UK chain has the largest market share of cycle retail within the UK, and can also be a serious motoring retailer.
The quantity clients are keen to spend on bikes has decreased, Halfords says, in a narrative that was first picked up by highway.cc, including that poor spring climate was persevering with to affect cycle gross sales.
The Halfords report additionally mentions the “failure of Wiggle”, which entered administration in October however was in the end purchased by Mike Ashley’s Frasers Group, and described the scenario as indicative of the broader challenges of the trade. The report additionally talks of how extra clients are shopping for on credit score.
“The market has turn into more difficult and aggressive because it continues to consolidate rapidly… and extra clients are buying on credit score, resulting in vital strain on gross margins,” it says. “The high-profile failure of Wiggle demonstrates a much wider problem for biking companies within the UK.”
Halfords had predicted a 1% decline within the biking market in 2024, nevertheless it really fell considerably greater than that – by 4%.
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“Low buyer confidence within the ongoing cost-of-living disaster has additional impacted demand for big-ticket, discretionary objects comparable to bikes,” it says.
It described the biking market – in addition to a difficult automotive tyre market during which shoppers have been delaying the alternative of harmful tyres – as “headwinds out of our management [that were] worse than anticipated”, however the Autocentres a part of the enterprise was described because the “star performer” and continued to fare effectively.
Extra broadly, the corporate’s revenue earlier than tax had fallen 18% to £36.1 million
Conversely, progress had been made in its Cycle to Work scheme which was up 8.3% yr on yr, and likewise at its high-performance on-line retail subsidiary Tredz, the place like-for-like gross sales have been up 11.1%, it mentioned.
The report added that it had “additional cemented management of the cycle market” and predicted that it will emerge in a stronger place than ever as soon as the market started to get well.
