IN their report to the City this morning, Argos and Homebase owner Home Retail Group (HRG) have announced that they expect profits to be poor after a disappointing peak shopping period.
Compared to the previous year, like-for-like sales fell 2.2 percent at Argos in the 18 weeks to January 2.
Their report also revealed that HRG expected profits to be on the lower end of the scale, between £92m and £118m.
Yesterday, the group – who rejected a takeover bid from Sainsbury’s in November – revealed it was in advanced talks with Australian company Wesfarmers for the sale of Homebase for £340m. Discussions started back in September, and a clear offer was made in Novemeber.
Wesfarmers owns the Coles supermarket chain, as well as Australia’s largest home improvement retailer, Bunnings.
With Homebase losing out on contracts from various brands, it seems that this takeover has come at an opportune time. The details of the purchase still have to be worked out but if it were to go ahead, it would be a much needed reinvigoration of a brand that has been slowly declining.
Last week, British supermarket chain Sainsbury’s revealed they approached Home Retail Group with the intention of purchasing Argos. Yesterday they revealed that if there were to buy the retail giant, then 200 high street Argos stores would be closed, and instead moved inside nearby Sainsbury’s stores.
The supermarket group revealed that it is in talks about what they plan to do next after being rebuffed with their first offer.
Colleagues of Argos must wait patiently to hear whether this news spells dramatic change for the company.
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