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Argos owner hails 'landmark' year of transformation, though sales and profits dip

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Argos owner hails 'landmark' year of transformation, though sales and profits dip
Argos owner hails 'landmark' year of transformation, though sales and profits dip
Home Retail Group chief executive John Walden today hailed a “landmark” year which had seen the Argos owner transform in more ways than one, moving towards an “exciting future”.

During the year the retailer transformed both its strategy, through its ongoing five-year digital transformation plan, launched in 2012, and itself, through the £340m sale of Homebase . That transformation will potentially continue if Home Retail Group accepts a £1.4bn bid from Sainsbury’s.

“The past year has been a landmark period for the group, during which we have completed the sale of Homebase and recommended to shareholders the offer from J Sainsbury for the acquisition of the remaining group, principally Argos. I am pleased that, with its offer for Home Retail Group, Sainsbury’s has recognised the good progress we have made in transforming Argos into a digital retail leader.”

During the year, he said, Argos, an Elite retailer in IRUK Top500 research, had made progress in its own transformation plan with the introduction of its Fast Track same day collection and delivery service. “We have been encouraged by the customer response to Fast Track with our on-time delivery rates and customer satisfaction having continued to improve to leading levels,” he said. “Argos now has a proven digital store model, including small formats and concessions, which require lower capital outlay and provide customers with fast access to an expanded product range regardless of store stock capacity.”

Group sales of £5.67bn in the year to February 27 were down on the £5.71bn recorded at the same time last year, with Argos sales slightly down at £4.095bn, from £4.096bn last time, and Homebase sales of £1.43bn down from £1.48bn last time. Pre-tax profits of £94.7m were down from £132.1m.

Argos’ reinvention has so far seen a national hub and spoke distribution network introduced, making about 20,000 products available for ordering and collection; Fast Track delivery and collection services, and a digital store model – enabling online ordering and collection from physical stores, including branches of Sainsbury’s.

Internet penetration has increased, with 49% of Argos sales made online in the full year, while m-commerce grew by 10% during the year to the point where 28% of total sales took place over mobile devices.

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