The last couple of weeks have seen the so-called British cycling boom continue apace. Two weeks ago London was brought to a standstill not just by the Tube strike but also by the London to Surrey Classic and, the week before that, Chris Froome won the Tour de France for the second time (much to the delight of the Weatherman!).
Since the Tour came to London back in 2007, cycling has really taken off in the UK, and a handful of businesses have positioned themselves perfectly to take advantage of this new trend. It is not the case, though, that these businesses have simply been able to sit back and let the profits roll in. Rapha has used its sponsorship of Team Sky – the team with which both Sir Bradley Wiggins and Chris Froome won the Tour – to leverage its position as the premium cycling clothing brand. As a result, the company has proved popular with the Mamil, or middle-aged men in lycra, group, which has been the biggest driver of the boom.
Retailer Evans Cycles was bought for a reported £100m by private equity firm ECI Partners. ECI said at the time that it invested because of the opportunity for further growth at the retailer. As cycling has taken off so too have the technological innovations that go with it. My personal favourite is Emily Brooke’s Laserlight, which I wrote about recently. Halfords in particular has achieved strong growth in the three years since the boom really took off in 2012, when Sir Bradley Wiggins won both the Tour de France and the individual time trial at the London Olympics.
There is always a risk with such booms that they will simply be a flash in the pan, with little measurable impact in the long term. Witness, for example, the aftermath of England’s win in the 2003 Rugby World Cup, or the questions around the legacy of those same Olympics. In 2013 Halfords’ then-CEO Matt Davies announced the ‘Getting into Gear’ strategy that would see the business invest £100m as it looked to generate £1bn of revenues by 2016.
The plan has gone so well that the target was reached a year early, and growth has continued into this year under new chief executive Jill McDonald. The original plan focused on customer service and revamping over 150 of its stores, and demonstrated the kind of customer-focused thinking that led Matt to his current job as UK & Ireland CEO at Tesco. The acquisition of the Boardman brand of bikes and the re-opening of the more specialised Cycle Republic shops followed last year.
The business has continued to innovate under its new management, announcing three weeks ago that it had launched an ecommerce marketplace that would offer some 40,000 new third-party products. The move makes sense, given that online sales accounted for a tenth of all revenue last year, and that Wiggle has already proved that cycling-related ecommerce can be a success. The new ecommerce platform is particularly brilliant because it allows Halfords, as the company itself pointed out, to react quickly to shifting trends in consumer behaviour. Such an ability is key as the retailer continues to work to turn this sudden boom into a sustainable cash cow in the long term.
Has the cycling revolution inspired you to take to the saddle? Let me know at moira@thembsgroup.co.uk and have a great weekend.