UPDATED: Halfords opens Cycle Republic store
Posted on 4 Jan 2009
UPDATE:
Latest updates since publishing this article on 27th October:
- Read a review of the Cycle Republic store in York by Retail Week
- Added a new photo of the York store
- A second Cycle Republic store has opened in Norwich
- Plenty of comments - see the end of the article
- Had massive interest in this article - lots of views from trade and public. This includes links to the article from cycling forums and blogs in and around York.
- A private discussion forum for Halfords staff called Halfords Voice is linking to the article - We would love to hear what Halfords staff think about this!
- Halfords have made a marketing mistake by not talking to us - our article now ranks No 1 in Google searches for "cycle republic york" and No 3 for "cycle republic". Probably not the best way to represent your new brand, and perfectly illustrates the power of the web in spreading news and ideas.
- We have also learned that a Cycle Republic website launches soon - and will aim to develop itself as an online social network via use of blogs, forums and ride lists. It will also offer online sales. In this context the "republic" brand clearly aims to define an online community of cyclists.
ORIGINAL ARTICLE:
Cycle Republic is Halfords' latest attempt at re-inventing the stand alone cycle store format and brand repositioning.
The new store opens in York on 31st October, located in a former Sofa Workshop site in the centre of the city.
Article continues below. View full size photo here
View full size photo here
After a number of years plugging ‘Bike Hut' and several re-inventions of the format the big H appears to have decided that they need a full scale revolution to capture more of the mid to high end bicycle market segment.
We take it that the word "Republic" and the revolutionary star icon is meant to suggest associations of a strident, vocal and vibrant independence (think Edinburgh Bicycle Co-Op) aligning this corporate retailer with Britain's new generation of urban cyclists. Hence no mention of Halfords anywhere in store!
The reality, as usual, is somewhat different. Halfords is Britain's largest corporate cycle retailer, and Cycle Republic is an attempt to grab market share from one of the last bastions of independent retail: your local independent specialist cycle retailer.
Whether or not the Republic will completely overthrow the Hut is still to be seen, and perhaps we may see different formats in different areas. Unfortunately nobody from Halfords wanted to tell us.
Halfords currently lists 6 standalone Bike Hut stores, with further concessions within the larger shed outlets. At launch 2 years ago Halfords suggested there could be room for 50 standalone Bike Hut stores nationwide.
Despite regular upbeat trading statements Halfords has failed to keep pace with the specialist cycle retail sector, and in their most recent update were performing 1.1% down on last year in the quarter to 26th September 2008. Clearly a sign that they are struggling as much as other large retailers to grow.
We were told earlier this year that the general economic down turn would give Halfords a boost as people sought to repair their cars to keep them running longer and would be cycling more, whilst also moving into new areas such as camping in an effort to increase efficiency in their oversized sheds. If all of this contributed to a decline in like-for-like sales how poorly has cycles been performing?
Halfords was the earliest adopter of the Government's Cycle to Work initiative and remains one of the lead providers of schemes aimed at ‘new cyclists'. Surely this growing phenomenon must be bolstering their like-for-like volumes even if the stores are suffering?
The problem might lie in the Bike Hut format itself. Early predictions of an aggressive roll out have come to nothing, with not only the numbers, but the strategy coming under scrutiny.
The format is still too formulaic and what might suit those cyclists wanting to challenge themselves on the Sussex downs doesn't necessarily suit the affluent families of London suburbs.
The challenges facing Halfords in the cycle market become more evident when compared with the performance of specialist cycle retailers in 2008. This has been another buoyant year for the independent cycle sector, with continuous healthy trading levels in May to September.
Recent analysis by ActSmart for ACT of over 250 independent cycle shops (representing £90 m retail sales) reflected a 25% sales increase in September 2008 vs. September 2007, despite the economic downturn and indifferent weather in the month.
ACT / ActSmart believes Halfords under values the size of the UK cycle retail market and therefore over-states their own market share. We believe this sector is worth over £850m in annual retail sales with significant growth continuing in the specialist sector. But maybe Halfords feels there is no need to consider cyclists outside of their own Republic.
On two occasions we asked Halfords for their input however nobody would comment.
