Takeover target Argos cuts the sales decline as turnaround plan takes effect

Argos, the chain at the centre of a bidding war, said the pace of sales declines at the electrical and home retailer halved as its overhaul remains on track.

Home Retail, the group that owns the chain, said like-for-like sales at Argos fell 1.1 per cent in the eight weeks to February 27, compared to a fall of 2.2 per cent in the previous quarter.

Home Retail chief executive John Walden called the last few weeks an “eventful period”, which saw it sell off its DIY chain Homebase to Australian conglomerate Wesfarmers for £340m in February.

The remaining part of the group, Argos, is at the centre of a bid battle between Sainsbury’s and South African-based retailer Steinhoff.

Last month Sainsbury’s had a £1.3bn bid for Home Retail trumped by Steinhoff’s £1.4bn offer.

Steinhoff – which owns UK furniture retailer Harveys – is listed on the Frankfurt and South African stock markets.

Sainsbury’s said last month a combination with Home Retail would create a ‘’world-leading’’ retailer bigger than rivals John Lewis and Amazon UK.

Both suitors have been given until March 18 to formalise offers.

Home Retail said total sales at Argos rose 1.9 per cent to £515m in the eight-week period, as demand for furniture and sports goods offset lower sales of electrical goods, such as video games and tablet computers. The group said Argos opened 90 new stores over the year, bringing its estate up to 845. It added this expansion impacted its like-for-like sales over the period.

The group said it expected to meet City full-year pre-tax profit forecasts of £93m.

Mr Walden said: “I am pleased with the continued improvement in Argos’ sales performance in the period, together with the continued progress in the Argos transformation plan to become a digital retail leader.”

Home Retail is installing tablet computers at its stores allowing customers to place orders.