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Argos, Homebase and Habitat owner reports profits down for fifth year Argos, Homebase and Habitat owner reports profits down for fifth year
(5 months later)
Argos has underlined the waning importance of the high street to retailers by revealing that more customers buy its products online and through click-and-collect services than by making traditional in-store purchases.Argos has underlined the waning importance of the high street to retailers by revealing that more customers buy its products online and through click-and-collect services than by making traditional in-store purchases.
Profits at its parent, Home Retail Group, which also owns Homebase and Habitat, have fallen for a fifth consecutive year as the retail industry undergoes a transformation against a backdrop of weak consumer confidence.Profits at its parent, Home Retail Group, which also owns Homebase and Habitat, have fallen for a fifth consecutive year as the retail industry undergoes a transformation against a backdrop of weak consumer confidence.
Home Retail Group reported a 23% fall in profit before tax to £99m in the 12 months to 2 March, with revenues broadly flat at £5.48bn.Home Retail Group reported a 23% fall in profit before tax to £99m in the 12 months to 2 March, with revenues broadly flat at £5.48bn.
Despite what he described a "challenging year", HRG's chief executive, Terry Duddy, said the transformation of Argos from a catalogue to a digital retail business was progressing, as he said like-for-like sales increased for the first time in five years, delivering a 2% rise in like-for-like revenues with underlying profits up 6% to £100m.Despite what he described a "challenging year", HRG's chief executive, Terry Duddy, said the transformation of Argos from a catalogue to a digital retail business was progressing, as he said like-for-like sales increased for the first time in five years, delivering a 2% rise in like-for-like revenues with underlying profits up 6% to £100m.
Duddy explained the key factor in growth was click-and-collect sales – where online purchases are collected in the shop – which now account for 30% of business.Duddy explained the key factor in growth was click-and-collect sales – where online purchases are collected in the shop – which now account for 30% of business.
He said: "If you go back to 2002 when we went from a telephone system for ordering products and went onto the internet for the first time, did I think that would now be 30% of our sales? No."He said: "If you go back to 2002 when we went from a telephone system for ordering products and went onto the internet for the first time, did I think that would now be 30% of our sales? No."
However, Homebase profits were washed away by poor weather last summer, with sales down nearly 5% and underlying profits halving to £11m.However, Homebase profits were washed away by poor weather last summer, with sales down nearly 5% and underlying profits halving to £11m.
With nearly £400m of cash in the bank and no debt, the company is pushing ahead with a three-year investment plan announced last October. Homebase stores will be given a facelift, and will increasingly stock products from Habitat and Laura Ashley, including a recently created range of Habitat paints, wallpapers and tiles.With nearly £400m of cash in the bank and no debt, the company is pushing ahead with a three-year investment plan announced last October. Homebase stores will be given a facelift, and will increasingly stock products from Habitat and Laura Ashley, including a recently created range of Habitat paints, wallpapers and tiles.
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