Halfords grabs cycle market share

Retailer's high-end cycle share grows, but chief exec warns over pressure on consumer spending into 2011
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Halfords saw revenue rise despite a slight fall in sales, the retail chain reported today in its half year results.

Over the 26 weeks to October 1st, revenue increased by 7.3 per cent to £456.3 million, while sales decreased by 4.9 per cent like-for-like. Profit before tax was up 12.8 per cent to £68.7 million.

Halfords said it saw sales and market share growth in the premium cycling sector – a long held target for the firm – while servicing, through the wefit and werepair brands, also saw strong growth.

“This has been a period of considerable progress for the Group,” said David Wild, Halfords chief executive.

Wild commented on Halfords' cost trimming strategies over recent months: “In addition to increasing profits, we have successfully completed a number of significant change initiatives. These include the reconfiguration of the Group’s warehouse and distribution network, the remodelling of staffing structures and the closure of our Central European operations. In total these reduce costs, enhance customer service and provide a strong platform for our next phase of growth that will be clearly focused in the UK. We are also pleased to have concluded the refinancing of the Group’s debt arrangements on favourable terms."

Wild revealed that the car sector would be in focus in the near future, with a national advertising campaign set to launch in spring 2011 driving awareness of Halfords' garage servicing and auto repair offering.

The chief exec also sounded a note of caution over the continually stuggling economy: "During this period we have demonstrated that Halfords is a resilient and cash generative business that can adapt to our customers’ changing needs and deliver growth initiatives for the future. Consumer spending is clearly under pressure and we believe this environment will continue into 2011. We hold market-leading positions however and remain confident that our strategy will deliver long-term sustainable earnings growth."

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