Home Retail Group to cut further costs
12 March 2009 09:43
Home retail Group (HRG) has pledged to cut more costs as its Homebase chain continued to struggle.
The company said that, following a fall in like-for-like sales of 10.2% at Homebase and a 1.6% drop at Argos, a number of "organisational changes" had been initiated.
Actions taken include a streamlining of head office functions across all parts of the group, restructuring of store-based staff to better match demand levels and trading patterns, and a consolidation of home delivery warehouses.
HRG added that a one-off charge of approximately £35 million will relate to these changes, although it declined to reveal what impact this will have on job numbers.
Chief executive Terry Duddy said the company was on track to meet market expectations for profits in the financial year to February 28th, although he warned the trading environment for the new financial year would be extremely challenging.
He added: "We are responding with the necessary trading and cost actions, and believe the group will maintain its strong relative position and competitive advantage."
Total sales at Argos were up by 1.6% at £575 million, helped by the addition of 23 stores over the past year whilst total sales at Homebase declined by 3.5% to £1.51 billion in the financial year as a whole.
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