Home Retail has insisted it will not embark on a policy of mass store closures at its Argos business after posting a 60 per cent slump in year profit and scrapped its dividend.
The owner of catalogue-based Argos stores and Homebase DIY chain remains cautious about the consumer outlook, adding it was operating in a particularly difficult trading environment with cash-strapped consumers bearing the brunt of the economic downturn.
Chief executive Terry Duddy said there “will not be an en masse store closure programme announced in the near future”, adding that only seven of Argos’s 750 stores were not making a profit.
Nearly 90 per cent of sales come through stores at some point. “It would not make any sense to close stores which are currently making us money,” he said.
Instead, the firm was only likely to close ten Argos stores over the next financial year, relocate several more to better locations and focus on selling goods to customers via multiple channels, including through mobile phones and the internet.
“We have got 300 or so stores coming up for lease renewal or lease break over the next five years or so. Each of those stores, at the point the lease renewal comes up, will be reviewed,” Mr Duddy said.
Meanwhile, Next continues to be propped up by a strong performance at its online business as the tough consumer climate weighs on its stores.
Retail-round-up: Page 7