Home Retail Group, the owner of Argos and Homebase, has said that its annual results are expected to be at the bottom end of expectations following a turbulent 18-week period at Argos and the speculation surrounding a potential sale of Homebase.
In the 18 weeks ended January 2nd, like-for-like sales at Argos fell 2.2% but rose 5% at Homebase.
Chief executive John Walden said that it had been a “very eventful” period for the group, in which Argos suffered a mixed performance, hampered by “volatile trading patterns resulting from particularly strong sales during Black Friday week, a shift in consumer demand from both the weeks before and after Black Friday, growth in digital transactions, reduced store footfall particularly on the high streets, and the continuing effects of price deflation”.
He added that The Homebase Productivity Plan, which includes an aggressive store closure program, overhead reductions and customer proposition improvements, has begun to position Homebase as a smaller, higher quality and more efficient business.
In the midst of this came the news yesterday that the company was in advanced discussions to sell Homebase to Australia's Wesfarmers, which owns Australia's biggest home improvement retailer, Bunnings, as well as the Coles supermarket chain.
Mr Walden said that the potential transaction would “allow the group to focus on Argos and its transformation plan, with an improved balance sheet and financial position, which I believe would represent an even greater opportunity for building long-term shareholder value.”
