HRG blames weak electronics market for falling sales
12 January 2012 10:28
Home Retail Group (HRG), owner of Argos and Homebase, has cited a weak consumer electronics market for another sharp drop in sales at its catalogue retail business.
In a trading statement released today, HRG said like-for-like sales at Argos fell by 8.8% in 18 weeks to December 31st, with the majority of the decline due to poor demand for video gaming and audio products.
It is the latest in a series of sub-par trading performance from the Argos business, which scraped a profit in the half-year to August and is closing a number of stores in the coming weeks as leases expire.
Home Retail added it would also close trial stores of its HomeStore&More homewares format at Abingdon, Aylesbury, Cambridge and Harlow.
The group said trading at Homebase outlets was more resilient, with like-for-like sales down by 2.6% amid subdued demand for "big-ticket" items.
Cost cutting has kept it on course to meet the City's forecast for profits of around £100 million in the year to February 28th, but the company warned investors to expect a significant cut in the full-year dividend payment.
Chief executive Terry Duddy described the trading environment as both volatile and demanding and said the company will continue to plan cautiously.
Mr Duddy added: "We will continue to plan cautiously with an ongoing focus on managing robustly both the cost base and the cash position of the Group while prioritising our investment in the ongoing development of our multi-channel capabilities."
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