Profits slip at Argos ahead of Sainsbury’s deal

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Argos made an operating profit of £83.1 million in the year to 27 February – down from £129.2m the year before, Home Retail Group has revealed in its annual results.

Argos concession in Sainsbury's supermarket.

Argos concession in Sainsbury’s supermarket.

The group, which has recommended a takeover offer by Sainsbury’s, said it had taken a goodwill impairment of £852m as a result of the offer – and this meant that it reported a total loss after tax of £808m.

During the year, Argos completed the national roll-out of Fast Track for both same-day home delivery and store collection, and it opened 94 digital concessions and collection points, taking the total number to 114.

Internet transactions accounted for 49 per cent of total Argos sales, including mobile commerce which grew by ten per cent to represent 28 per cent of total sales.

Home Retail Group completed the sale of Homebase for £340m on 27 February.

CEO John Walden said: “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 plc 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 we continued to progress the Argos Transformation Plan, including the introduction of Fast Track, which offer market-leading propositions for both same-day home delivery and store collection. 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. Argos also 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.”


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