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Argos owner pledges multichannel investment despite falling sales

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Argos-owner the Home Retail Group today pledged to continue to invest in multichannel despite falling sales and plummeting profits.

The company today reported a 5% slide in sales to £5.58bn during the 53 weeks to March 3, and said pre-tax profits were down by 60% to £104.1m, from £265.2m last year.

Terry Duddy, chief executive of Home Retail Group, said: “While we remain cautious about the consumer outlook over the short term, we are well positioned operationally and we will continue to prioritise investment in our leading multichannel capabilities to shape the future of shopping for our customers, ensuring we bring unrivalled convenience and value to customers' everyday lives, whether shopping at home or on the move.”

Argos remains the second largest internet retailer in the UK, with more than 430m site visits over the last year. Sales worth £1.9bn – equivalent to 48% of total Argos sales - now involve the internet, and Check and Reserve is the company’s fastest growing channel.

Argos’ mobile shopping grew three times to 6% of total sales by the end of the year, reported the Home Retail Group. At the same time its sister company Homebase reported multichannel sales of 4% of its total £1.5bn sales.

A 6% decline in Argos’ sales, to £3.9bn, was put down to the falling consumer electronics market, which accounted for around 80% of the reduction in sales.

Duddy said Home Retail Group had been at the forefront of technological advance – that reflected “a fundamental shift in the way consumers shop,” and would continue to maintain that position. “We will prioritise future investment into these multi- channel capabilities to satisfy customers in whichever way they wish to interact and shop with us, including the convenience of immediate product collection via our store networks,” he said.

In the short-term that will mean new applications for tablet devices and work to refresh its website ahead of the Christmas season.

But Duddy said that while stores remained “a critical part of the multichannel offer,” the company would be able to “manage proactively the size of its store estate,” where around 300 store lease renewals or break clauses will come into effect over the next five years, of which some 230 are for Argos stores.
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