New Argos boss to look at business ‘without constraints’

The newly appointed managing director of Argos, the catalogue and store chain, said he has been given a free rein to examine all options for the struggling business, including closing some of its 750 shops.

John Walden, a 52-year-old American who started his job at the Home Retail owned business three days ago, told Reuters on Thursday: "They've certainly given me really a complete blank piece of paper and asked me to bring a new perspective to the business without constraints."

"I will look at it fresh and we'll do a lot of digging and try to understand what we think the opportunity is and then we'll talk about how to go after it," the former Best Buy and Sears executive said.

Some analysts say Argos has too many stores and needs to cull them.

Home Retail's chief executive Terry Duddy has countered that none of them are losing money, while a big closure programme would come with a heavy restructuring cost.

He has argued that Argos can manage its store portfolio as 180 stores are up for lease renewal or have break clauses over the next five years.

With 40 percent of Argos' sales now made over the Internet and 10 percent of internet sales made via smartphones, Duddy's strategy has been to invest in a variety of purchasing options.

A key driver of growth in this area is Argos' online Check & Reserve service, which requires in-store pick-up by customers.

"In terms of the store franchise I'll be looking at that with a fresh view as well. I'm open to all options, including shutting down stores or growing stores," said Walden.

"The notion of shutting down profitable stores seems strange to me but I think it does depend on the lease terms."

The new MD said it was too early to say when he will present the results of his review to investors.

Argos, which last month posted dire Christmas sales, is facing intense competition from supermarkets, specialists and internet players.

It has been particularly hard hit in the economic downturn because its predominantly low-income customers are suffering the most severe of budget squeezes.

"I was attracted by the assets and still continue to be quite optimistic that these various assets the company has developed can be pulled together in a way that we can offer a compelling proposition," said Walden.

"I'm quite enthusiastic that we can pull together the assets we've got in a way that we can be much more competitive and faster growing than we've been recently."

Shares in Argos, which have lost over half their value over the last year, were down 1.3 percent at 104.25 pence at 11:51 a.m., valuing the business at 849 million pounds.

Source : James Davey & Matt Scuffham – Reuters
http://uk.reuters.com/article/2012/02/23/uk-argos-idUKTRE81M0S220120223