Argos sales rise while Homebase sees operating profit fall by half

Argos's like-for-like sales rose by 2.1pc in the 52 weeks to March 2, following a 8.9pc drop in the previous year. More than half of the retailer's sales are now coming from outside its stores, with rapid growth in its internet and mobile app sales.

The pressure on Argos has eroded profits for the retailer's parent company Home Retail Group over the last few years.

The recovery in sales at Argos helped to slow the decline in Home Retail's benchmark pre-tax profits to 10pc. However, the profits of £91m are still significantly below the £433m that Home Retail collected five years ago.

Terry Duddy, chief executive of Home Retail, said it was an "encouraging year" for the company, which also owns DIY chain Homebase.

Mr Duddy and the chief executive of Argos, John Walden, are launching a £300m investment plan to revitalise Argos over the next three years. This involves replacing the famous laminate catalogues in stores with touchscreen computers, offering more exclusive products, and closing around 75 stores as leases expire.

Mr Duddy said: "Argos delivered like-for-like sales growth for the first time in five years and multi-channel sales broke through the 50pc threshold.

"Our strong financial position enables Argos to deliver on its transformation plan to become a digital retail leader, and for Homebase to invest in the rollout of its new proposition.”

Although Argos sales recovered, Homebase is under pressure from the challenging economic environment and cold weather in the UK. Like-for-like sales for Homebase fell by 4.9pc and operating profits halved to £11m.

The company said it started trials of "dramatically different store formats" for Homebase which will include "increased levels of staff service which creates a shopping experience where customers find ideas and inspiration for their homes and gardens".

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Source : Graham Ruddick – The Telegraph
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10029574/Argos-sales-rise-for-first-time-in-five-years.html