Home Retail Group is to close a quarter of stores at its DIY chain Homebase following a review of the business. The company said that a number of its 323 Homebase stores are either “unprofitable or are in decline" and would face closures under a three-year transformation plan, but insisted that Homebase is “a good business with the basis for future growth”.

In a results statement covering the half year to August 30th, HRG said that like-for-like sales at both Argos and Homebase had risen, with a 3% rise in total sales growth.
John Walden, chief executive, commented: “The group has performed well in the first half of the year, delivering further like-for-like sales growth at both Argos and Homebase and a 13% increase in group benchmark profit before tax.

"Argos continued to build on its sales growth from the previous financial year, increased its benchmark operating profit whilst also making good progress with its Transformation Plan. Homebase delivered a good peak trading period, performing well throughout the half despite being up against the tough comparators of a strong second quarter last year. At this mid-way point in our financial year, we continue to expect to deliver full-year benchmark profit before tax in line with current market expectations, however, as always the full-year outcome will depend upon the important Argos Christmas trading period.

"In April I set out my near term priorities for the Group, which included undertaking a comprehensive review of Group strategy and its priorities going forward, in particular as they relate to Homebase. I have completed this review, which encompassed a range of market, strategic and operational factors.

“The successful delivery of the Argos Transformation Plan over its remaining three years continues to be the Group's strategic priority and its greatest potential source of shareholder value. Homebase is a good business with the basis for future growth. In this context, Homebase will pursue a three-year plan through to the end of FY18 to improve the productivity of its store estate, strengthen its propositions and accelerate its digital capabilities by leveraging Argos' investments. This will position Homebase as a smaller but stronger business, ready for investment and growth."