Britain’s summer of sport may have got off to a damp start, yet no one can argue that the Olympic and Paralympic Games have been a huge success. With entertaining opening and closing ceremonies and the best of international athleticism on display, crowds arrived on British shores amidst a high level of anticipation.
In fact, the aftermath of the Games continues to fuel the country, with businesses profiting from the aura of excitement despite the fact that the sales boom predicted by organisers Locog failed to materialise during the actual month that the athletics were taking place. And with British Gold medallist Bradley Wiggins continuing to perform outstandingly in cycling events around the country, Halfords is one retailer rubbing its hands with glee.
Bradley Wiggins, as well as beating back competition at the Olympics, also recently scooped a win in the Tour de France – becoming the first Briton to achieve the accolade. Also driving enthusiasm for cycling in the UK are Gold medallists Chris Boardman and Victoria Pendleton, both of whom have released ranges at Halfords since the conclusion of the Games.
The retailer reported excellent sales of both ranges, contributing to a 14.7 per cent growth in bicycle sales overall. As a result, Halfords says it expects to post a first half pre-tax profit of between £40 million and £42 million, thus outperforming City predictions by a staggering 20 per cent.
Following this week’s announcement by Halfords, City forecasts for the full year have been set at the top end of previous predictions, with the retailer expected to post profits of around £70 million.
The turnaround for Halfords has been nothing less than astonishing, especially as it was only in July that the chain was forced to post a profit warning, leading to the resignation of former CEO David Wild. He will be replaced this week by former Pets at Home director Matt Davies – who, it is fair to say, is entering the business at a highly opportune moment. He said in a previous statement that he wishes to help Halfords achieve its “full potential.”
Of course, it is not simply the Olympic Games to be thanked for Halfords’ change in fortune, as the recent good weather has also played a role in the 4.6 per cent increase in sales for the 13 weeks leading up to September 28. This has helped the retailer gain ground lost in the previous quarter, where sales dropped 7.5 per cent.
Dennis Millard, Chairman of the company, stated his relief at the turnaround for Halfords, but made it clear that no one would be expecting to coast through the remainder of the year.
He said; “Our second half planning assumptions, however, remain cautious given the prevailing pressures on the consumer as we approach the important winter and Christmas trading periods.”
Yet it was not only the retail side of the business which managed to exceed expectations, as the company’s Autocentres saw their highest like for like performance since the brand was taken over in February 2010. Following on from a successful first quarter, where a 9.2 per cent sales increase was recorded, the junior company achieved a further boost in sales in the second quarter – this time of 12.4 per cent.
Do you think businesses like Halfords are heavily influenced by changing trends and fashions within society, such as the cycling success of Bradley Wiggins, Victoria Pendleton and Chris Boardman? Or do you think that seasonal conditions are the reason for fluctuating sales, meaning that the brand will perform better in good weather than in bad?
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