It was to be the store chain that tapped into the revolution taking place on the roads of Britain, but Bikehut, the specialist cycling retailer, has veered off into the ditch.

Halfords, its owner, which accounts for one in three bicycles sold in the UK, said yesterday that it was scrapping the Bikehut and Cycle Republic brands after less than three years. “We no longer believe that the standalone concept will deliver the absolute levels of financial return demanded of Halfords’ investments,” it said.

Bikehut and Cycle Republic were started as pilots by the previous Halfords management. They were inspired by a recognition that, although Halfords was strong in the mainstream cycling market, it was weaker in premium lines of bicycles costing £300 or more. The company upgraded its Apollo range and launched a more specialist range under the Carrera banner.

The first standalone Bikehut store opened in Brighton in November 2006 and a second, in Putney, South London, followed. By April 2007, Halfords was predicting that it could open as many as 50 such stores.

However, it seems that the hardcore aficionados – such as the nose-studded couriers who prop up the counters of independent cycling shops to discuss sprockets – have not been using the stores in sufficient numbers. Industry sources say that Halfords experienced difficulty in persuading some high-end manufacturers, such as Trek and Cannondale, to provide sufficient stock.

David Wild, the chief executive of Halfords since last June, said: “We were disappointed not to secure the relationships we wanted with some cycle manufacturers, and we will carry on trying to do so for the Halfords format.”

The company will shut its Cycle Republic store in York; the other, in Norwich, and the six Bikehut stores will be converted to the Halfords Metro format at a cost of £1.2 million.

According to Mr Wild, Bikehut and Cycle Republic have been hit by the growing trend to buy cycling accessories over the internet, while Halfords has also become more successful at selling premium cycles. He added: “The standalone store format was about saying we’re great at bikes, we’re the market leader, but the market share in premium bikes is less than the mainstream. Where premium bikes are sold, they’re sold in small stores. But we had a hard look at those stores and we decided we can sell premium bikes in Halfords.”

The company is said to be winning market share at the premium end of the market – where, until recently, it accounted for only one in six bikes sold in Britain – thanks to the success of its Boardman brand. The range, designed in partnership with Chris Boardman. the British 1992 Olympic champion, was launched in June 2007 with nine models and 30 frame sizes at prices of up to £1,400. Nicole Cooke won Team GB’s first gold medal of the Beijing Olympics while riding a Boardman cycle.

Halfords is flourishing at the more basic end of the market. Mr Wild said that, in the past year, Halfords had seen a 50 per cent jump, to 34,000, in the number of commuters buying bikes through the Government’s Cycle2Work scheme. For the second consecutive year Halfords sold more than one million bicycles.

Overall, Halfords’ like-for-like sales in the 52 weeks to March 27 were down by 3.3 per cent on the same period a year earlier, although the decline was only 3 per cent if the earlier timing of Easter last year is considered. Mr Wild said that much of this decline was owed to a slowdown in the sales of satellite navigation systems for cars.

The shares rose 3½p to 317¾p.

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