Bikes and tikes stores do well amid the gloom

Nov 16 2009 by Peter McCusker, The Journal

RETAIL pair Halfords and Mothercare will post interim results this week, having pulled through the recession in decent shape.

Car parts and bike chain Halfords, which reports half-year figures on Thursday, is likely to confirm it has secured further benefits from trends emerging amid the recession.

The group has already shown that it is picking up business from the “make do and mend“ attitude, with car maintenance now big business, while hard- up consumers cycling to work and holidaying in the UK have also provided a boost.

Halfords said it expected profits of between £59m and £61m in the six months to October 2, against profits of £49.1m for the same period last year.

The firm said sales rose by 2.2% in the second quarter as the popularity of domestic holidays saw demand for camping equipment soar.

Analysts are forecasting interim profits at the top end of the range, despite the tough retail environment.

Sam Hart, retail analyst at Charles Stanley stockbrokers, said he was expecting a “solid“ set of half-year results. He said: “Cycling remains a structural growth market in the UK, driven by health, environmental and anti-congestion considerations.”

The market will also be looking for any update on the group’s international operations after trading in Ireland weakened in the recession.

Retail chain Mothercare reports half-year figures on Wednesday after a solid year so far for the group as it shrugs off the high-street gloom.

Mothercare reported like-for-like sales up 4.1% in the six months to October 10 after notching up its 17th quarter of UK sales growth in a row.

The firm, which acquired the Early Learning Centre (ELC) for £85m in June 2007, has been making strides in international markets while also driving strong growth in the UK through canny strategic moves. The ELC takeover has enabled it to carry ELC products in Mothercare stores, which is supporting domestic sales, up 3% in the the second quarter.

This helped offset higher costs, including in pensions and the impact of the weak pound on imports. Total sales including overseas trade rose 7% in the second quarter.