Homebase is looking for a new managing director after the news that current incumbent Paul Loft is to leave the business as it embarks on a three-year productivity plan set to see it follow in the digital footsteps of sister company Argos.
Loft will remain in post until a successor is found, Homebase parent company the Home Retail Group said today. The productivity plan will see Homebase store numbers cut by about a quarter from the 323 it had at the beginning of the financial year, while the company will focus on customer experience both in stores and online. Homebase will tap into the investment that underpins Argos’ multi-platform apps and product fulfilment. So far, its recently-upgraded website has seen multichannel sales grow by 12% in the first half of its financial year, taking them to 7% of total Homebase sales. Homebase total sales hit £835m in the first-half, up by 1.5% on the same time last year.
Meanwhile, Home Retail Group said that Argos would have about 50 of its new format digital stores (pictured) up and running in time for the peak Christmas trading period.
It said 22% per cent of Argos sales took place over mobile devices in the first half of its financial year, part of the 43% of its sales that take place online. Total sales of £1.8bn were 3% up on the same time last year. The rapid expansion of its digital store format, which includes fast-track click and collect, comes at a time when its supporting hub and spoke distribution model has now been rolled out to Argos’ entire UK store estate. Some 150 hub stores serve about 550 spoke stores in an operation designed to ensure customers can get same-day access to about 20,000 products. During the Christmas trading period, Argos will trial same-day home delivery from hub stores.
Argos said it also believed more retailers could benefit from the model in which eBay customers are now able to collect online orders from its high street stores around the country. It is also working to grow the business by appealing to customers beyond its core market of less affluent shoppers. To that end it is adding aspirational products such as Thule luggage, Recaro child seats and Denon audio equipment.
Home Retail Group today reported sales of £2.7bn in the six months to August 30, 3% up on the same time last year, but pre-tax profits of £13.5m, down 5% from £14.2m at the same time last year after exceptional charges of £11.8m, of which £6.7m relates to investment in programmes to transform Argos into a digital retail leader. A further £5.1m related to the outsourcing of Argos’ information systems infrastructure management.
