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Argos multichannel sales hit £1.9bn

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Argos notched up multichannel sales of £1.9bn in its latest financial year, accounting for 43% of total sales, parent company Home Retail Group said as it announced full-year results.

HRG said 32% of Argos’ sales were over the internet, in the year to February 27 2010. Two-thirds of these, or 22% of total sales, were through the Check & Reserve for store collection service. In all, it said, Argos continued to be the second-largest internet retailer in the UK after Amazon, with 300m website visits driving £1.4bn of sales in the last year.

The multichannel side of the business is expected to drive further growth in the year ahead. HRG’s chief executive Terry Duddy, said: “By continuing to invest and constantly develop our multi-channel leadership and differentiated formats, we will retain our competitive advantage and therefore remain well-placed for the future.”

Argos is using the internet to expand customer choice well beyond the 19,300 lines featured in its famously-extensive catalogue. Of the products featured in its catalogue, 15,000 lines can be bought through stores, but a further 10,000 products are being trialled as available online only, Argos owner Home Retail Group said in its full-year results. The online-only range includes technology, office supplies, photography and consumer electronics, as well as white goods.

Argos will also trial further extended online ranges in order, said the HRG results, to “establish the full opportunity.” It said it would also “begin to explore the development of an ordered-in capability for the customer to benefit from the convenience of store-based collection.”

Meanwhile, it said there were now more than 500,000 online product reviews while about 75% of products carry a customer rating. Richer content to be introduced in the next year includes new product image technology and how to guides. Ask and answer facilities are to be extended, while an Apple iPhone app is soon to be launched.

Further developments during the year ahead will include the refurbishment of some 130 stores with technology including new kiosks, catalogue browsers, and call forward technology.

The update on multichannel investment came as Home Retail Group reported full-year sales of £6.02bn, up from £5.89bn at the same time last year. Of those, £4.34bn came from Argos, up 1.5% from £4.28bn at the same time last year, though like-for-like sales, stripping out the effect of store openings and closings showed a 2.1% fall in sales.

The company said it had been affected by the fall in the sale of home goods that accompanied the financial crisis, and operating profits at Argos fell from £266.2m from £303.6m at the same time last year. Across the group, which also owns Homebase and a financial services division, pre-tax profits fell to benchmark pre-tax profits across the group fell 11% to £292.9m from £327.7m last year.

But after exceptional costs incurred in the last financial year were taken into account, bottom line pre-tax profits came in at £293.0 this year compared to a loss of £394.2m last year.

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