Halfords reported record sales of camping equipment today as the retailer benefited from frugal holidaymakers seeking to save money in the economic downturn.
The Redditch-based group’s main markets are car parts and bicycles, but sales of its camping range have blossomed as the recession and a weak pound encourage more people to holiday at home.
“Having only participated in the mainstream camping equipment market for four years, and despite the poor weather throughout the summer, 2008 was Halfords’ most successful season to date,” Halfords said today. It will now expand its range of tents, sleeping bags and other camping equipment.
Many British retailers have struggled over the past year as shoppers curb spending amid rising unemployment, sliding house prices and fears of a long and deep recession.
But Halfords has fared better than most, thanks to its exposure to less discretionary areas of spending, such as car maintenance, as well as the growing popularity of environmentally friendly activities like cycling and camping.
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The company reported an expected 2.4 per cent rise in full-year profit today and said it saw significant opportunities for future growth within its UK business.
Halfords, which runs 438 stores in the UK, said profit before tax and one-off items was £92.4 million in 2008/9, in line with previous company guidance and up from £90.2 million the previous year.
“We naturally remain cautious given the continued fragility of the economy and consumer confidence,” David Wild, the chief executive said. “There are however, clear indications that Halfords is well positioned to deliver further earnings growth in the year ahead.”
The Redditch-based retailer said it increased market share despite a 0.3 percent fall in revenue to £795 million. Its gross margin was up 160 basis points.
The company, which sells around one in three bikes in the UK and said the cycling market continued to benefit from environmental and economic factors. Both its cycling and car maintenance businesses saw “healthy” like-for-like sales, Halfords said.
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“At a time when much of the high street was impacted by the recession, we have delivered an 8.5 per cent increase in underlying earnings per share,” the company said.
The company did not escaped the global recession, Mr Wild admitted, and had experienced a year-on-year decline in revenues for the first time in more than two decades.
The group reduced its year-end net debt by 9.7 percent to £164 million and raised its total dividend payment by 5.3 per cent to 15.9 pence.
Shares in Halfords have increased in value by 23 percent over the last year, outperforming the UK general retailers’ index by 33 percent.
The stock closed on Tuesday at 342.5 pence, valuing the business at £719 million.