Argos claims vindication over multi-channel strategy

HOME RETAIL claimed vindication for a decision not to reduce its extensive Argos chain, saying it was proving a lucrative asset as shoppers increasingly opt to order online then collect goods from stores.

During the economic downturn, Argos’ 734-strong store portfolio was seen by some analysts and investors as a structural, and potentially fatal, weakness as more spending moves to the internet.

But as the popularity of ‘click and collect’, or what the company calls check and reserve, has grown, its estate is now seen as a competitive advantage.

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Click and collect – which means customers don’t have to wait at home for a delivery – represented 29 per cent of total Argos sales of £868m in the 13 weeks to May 31, Home Retail’s fiscal first quarter, the company said.

Overall internet sales were 42 per cent of total sales.

Sales at Argos stores open for more than a year rose 4.9 per cent compared with the year before, the company said, ahead of analysts’ average forecast of 3.7 per cent and an eighth consecutive quarterly rise.

Sales were driven by demand for garden furniture and outdoor toys on the back of better weather than last year, as well as sales of video games and TVs ahead of the World Cup.

“People were writing articles less than two years ago saying that we needed to do an emergency rights issue and close a third of our portfolio,” finance director Richard Ashton said.