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Home Retail Group sees 'mixed' Christmas sales Argos sales fall hits Home Retail Group
(35 minutes later)
The owner of Argos and Homebase, Home Retail Group, has said annual profits will be at the low end of expectations as it reported mixed Christmas trading.The owner of Argos and Homebase, Home Retail Group, has said annual profits will be at the low end of expectations as it reported mixed Christmas trading.
Like-for-like sales at Argos fell 2.2% in the 18 weeks to 2 January, but they rose 5% at DIY chain Homebase.Like-for-like sales at Argos fell 2.2% in the 18 weeks to 2 January, but they rose 5% at DIY chain Homebase.
On Wednesday, Home Retail Group said it was in talks to sell Homebase to an Australia's Wesfarmers for £340m. Home Retail said annual profits were now set to be at the bottom end of current expectations of £92m-£118m.
Last week, Sainsbury's said Home Retail Group had rejected takeover approach in November. On Wednesday, Home Retail Group said it was in talks to sell Homebase to Australia's Wesfarmers for £340m.
HRG said that it began discussions with Wesfarmers in September, with a firm offer resulting in November.
Wesfarmers owns Australia's biggest home improvement retailer, Bunnings, as well as the Coles supermarket chain.
Last week, Sainsbury's said Home Retail Group (HRG) had rejected a takeover approach in November.
On Wednesday, Sainsbury's said it could shut up to 200 Argos stores and relocate them within its supermarkets if it bought HRG.
The supermarket group said it was considering its options after its initial bid approach was turned down.
Digital transformation
Home Retail Group chief executive John Walden, said he believed the sale of Homebase to Wesfarmers would "provide good value to shareholders" and allow HRG to focus on its efforts to improve Argos' balance sheet and overall financial position.
HRG said Argos had made meaningful progress towards its reinvention as a "digital retail leader".
Mr Walden added: "I continue to believe that the capabilities being develop in the Argos transformation plan will position Argos as a retail leader in an increasingly digital future."
The group added Argos had experienced its best ever sales day on Black Friday, with total sales up 41%. Online sales were up 45% in the week leading to Black Friday and accounted for 62% of total sales compared with 52% a year earlier.
For the entire period online sales grew 9%, representing 53% of total Argos sales compared with 49% a year earlier.