Halfords misses the cold starts

The balmy spring weather may be welcomed by most Brits, but it has not been helping those retailers that rely on a bit of cold weather to help drive sales.

Car parts and bikes retailer Halfords is revealing a pre-close statement next week and the mild winter is expected to have hit car maintenance sales, according to Oriel analyst Jonathan Pritchard.

He is expecting Halfords’ retail like-for-likes to be down 3.2% in its fourth quarter. “We do not expect it to look pretty,” Pritchard warned. “Cold weather car malfunctions have been at a minimum.”

The rising cost of petrol will also have discouraged car usage too, which will have proved unhelpful for the retailer.

But it is not just external factors that Halfords has been grappling with. Pritchard points to the company’s decision to scale back staffing in stores from 2009 to 2011, which in his opinion led to a fall in customer service, and thus a decline in sales.

However, the analyst retains his buy stance on Halfords, because the retailer is “righting the wrongs”, and recruiting and training more staff to improve service levels, as well as focusing on pricing and range.

There are more reasons to be cheerful. While the motor side of the business has been slowing down, bicycle sales have moved up a gear, with like-for-likes increasing by 15.1% in its third quarter, driven by a strong performance in children’s bikes over the Christmas period. The trend is expected to continue in the run-up to the Olympics.

Halfords has been capitalising on the opportunity provided by London 2012, and has tied up with World and Olympic cycle champion Victoria Pendleton to design an exclusive range of women’s bikes.

After its successful partnership with cycling ace Chris Boardman, the new range will no doubt chime with bike lovers.

Halfords’ update next week may not be pretty, but the long-term outlook for the business will ensure it is not a car crash either.