Home Retail Group's profits drop 70%
Home Retail Group, the owner of Argos and Homebase, has reported a 70% fall in the groups first half pre-tax profits to £28 million.
Sales declined 6% to £2.57 billion from the £2.72 billion achieved last year.
Total sales at Argos fell 7.6% to £1.7 billion while like-for-like sales declined by 9.1% in the 26 weeks to 27 August. Operating profit dropped 94% to £3.4 million.
Home Retail Group said sales of consumer electronics had been particularly challenging for the retailer, falling 20% over the period. Multi-channel sales continued to grow and now represent £770 million or 46% of Argos total sales. Home Retail Group said the fastest growing channel was the online Check & Reserve service, which had grown to represent 22% of all sales.
Homebase did better with like-for-like sales down by 0.6% and total sales falling 1.8% to £840 million in the period. Home Retail Group said the DIY chain had performed well in a difficult trading environment, although the big ticket category remained challenging.
Terry Duddy, chief executive of Home Retail Group, commented:
"Homebase delivered another robust performance in its peak trading period. Core customers at Argos have continued to be under greater pressure and there were ongoing challenging conditions across several product categories, most notably consumer electronics.
"As we now enter our busiest trading period market conditions remain both weak and volatile, and in these early weeks of the second half we have not seen the improvement in sales that we had anticipated. We are well positioned operationally and we will continue to shape the future of shopping for our customers, ensuring we bring unrivalled convenience and value to customers' every day lives, whether shopping at home or on the move."
In a separate announcement, Home Retail Group said it had agreed to launch a joint venture company with the Haier Group to roll out its Argos stores in China.
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