Tale of two brands at Home Retail Group
12 June 2008 09:34
Home Retail Group has announced decidedly mixed results after sliding sales at Homebase were offset by Argos, which delivered a better-than-expected performance for the 13 weeks to May 31st. The 12% fall in Homebase's like-for-like sales reflected poor weather conditions in March and April, with sales of seasonal products down by around a fifth in the quarter. In contrast, on a same-store basis, sales at Argos were at the level seen last year, helped by high demand for consumer electronics. Total sales at Argos grew by 4% to £929 million, with three openings and one store closure taking the total portfolio to 709 outlets at the end of the quarter, up from 683 sites a year earlier. New space contributed 7% to Homebase sales and meant overall revenues for the DIY chain were down 5% at £440 million in the period. The figures were better than the 2% drop, which had been forecasted by analysts, although Homebase's decline compared with market fears for a fall of between 8% and 12%. Terry Duddy, chief executive, commented: "As highlighted at our recent full-year results, Argos has begun the year in line with our expectations overall, with a resilient sales performance being driven by lower margin consumer electronics categories. Homebase's initial trading period was weaker than anticipated, with sales impacted by poor weather conditions. While the consumer outlook remains challenging, we approach it from a position of both financial and operational strength, and at this early stage our expectations for the full year are unchanged".
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