National: Argos signals more store closures as profits tumble
THE future of more than 200 Argos stores was placed in doubt today following a slide in profits at the catalogue retail chain.
Parent company Home Retail Group said that the leases on around 230 Argos stores were due to come up for renewal over the next five years and these outlets could be considered for relocation or closure.
Home Retail also delivered a blow to shareholders by scrapping its final dividend as it revealed that operating profits at Argos, which currently has of 748 stores, plunged by nearly 60% to �94.2million in the year to February 25, with like-for-like sales down by 9%.
The group, which also owns DIY and garden centres chain Homebase, saw pre-tax profits slide more than 60% to �90.2m for the year.
Homebase, which has 341 stores, saw its like-for-like sales drop 2%, while operating profits fell 50% to �22.8m in the same period.
Big ticket sales such as new kitchens and bathrooms were lower at Homebase, the group said, as consumers reined in spending.
Newly-appointed Argos managing director John Walden has reportedly hired OC&C Strategy Consulting to look at the business, further fuelling speculation over store closures.
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In a sign that Argos will shift focus from stores to the internet, Home Retail said the chain would continue to develop its online and mobile offering, including a refreshed website ahead of Christmas.
The group said multi-channel sales now made up 48% of total sales, with 39% from online, while total sales from mobile shopping were around 6%.
No details were given today of the stores potentially affected by the expiry of leases over the next five years. Argos currently has more than 30 stores in East Anglia, with Ipswich and Lowestoft among a number of towns which have both a town centre branch and an out-of-town Argos Extra store.
Argos currently expects to close around 10 stores in the current financial year as it continues to roll out its refurbishment programme. A further 200 stores were revamped last year and the group aims to refurbish 350 stores by the end of the financial year.
The majority of Argos’s sales decline was down to the consumer electronics market, particularly televisions and video games, although laptops and tablets, such as Apple’s iPad continued to grow.