Home Retail, Britain's biggest household goods retailer, said it plans to reposition its troubled Argos division from a catalogue-led business to a digitally-led offering, as the group posted another slump in profit.
As part of the change the group is likely to close at least 75 of Argos's near 750-store estate over the next five years. Argos has 40 shops in Ireland and is one of the largest retail employers in the State with approximately 1,500 employees.
The firm said it was targeting £4.5 billion (€5.5 billion) of sales for Argos by 2018 and would invest £100 million a year in the business over the next three years to achieve this.
The plan, which follows a six-month strategic review, involves repositioning Argos's channels for a digital future, providing more product choice available to customers faster, developing a customer with universal appeal and operating a leaner and more flexible cost base.
For the six months to September 1st, Home Retail, which also owns the Homebase home improvement chain, reported an underlying pre-tax profit of £18 million, down 37 per cent.
That compared to analysts' consensus forecast of £12.2 million, according to a company poll. Sales fell 1 per cent to £2.53 billion.
Many British retailers have been under pressure as consumers are squeezed by higher prices, muted wage growth and government austerity measures designed to cut record national debt.
The near 750-store Argos business has been particularly badly hit because its mainly low-income customers have suffered most and because it also faces intense competition from supermarket chains, specialists and online retailers such as Amazon.
Home Retail is paying an interim dividend of 1 pence, down from 4.7 pence last time.
Reuters
