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| Argos reports strong sales boosted by click-and-collect | |
| (35 minutes later) | |
| Argos has reported healthy sales growth as more customers took up its online ordering service and its mobile app. | |
| href="http://www.homeretailgroup.com/news-and-media/news.aspx?smlbus=1690&article=4602" >The retailer reported 2.7% like-for-like growth, during its peak autumn period, with consumer electronics, notably tablet computers, selling well. | |
| Shares in its parent, Home Retail Group, which also owns DIY chain Homebase, jumped 15% on the news. | |
| The firm's "check and reserve" ordering service grew its share of sales from 28% to 31% over the last four months. | |
| Orders placed online via mobiles and tablets more than doubled so that 42% of Argos' business is now conducted online. | |
| Chief executive Terry Duddy said Argos' strong sales meant pre-tax profits were on course to beat forecasts. | Chief executive Terry Duddy said Argos' strong sales meant pre-tax profits were on course to beat forecasts. |
| He said profits could be £10m higher than the £73m previously expected on average by market analysts. | He said profits could be £10m higher than the £73m previously expected on average by market analysts. |
| "Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focused on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," he said. | "Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focused on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition," he said. |
| Margins | Margins |
| Home Retail Group also said the decline at its DIY chain Homebase slowed to a 3.9% drop in sales versus a year ago. | |
| The sales figures for both units exclude the impact of store closures. Including this effect, sales in the 18 weeks to 5 January rose 1.6% at Argos, and fell 4.5% at Homebase. | The sales figures for both units exclude the impact of store closures. Including this effect, sales in the 18 weeks to 5 January rose 1.6% at Argos, and fell 4.5% at Homebase. |
| Three more Homebase stores closed during the reporting period, cutting the total number to 337. The number of Argos stores held steady at 739 during the reporting period, but a further nine stores have been shuttered since the New Year. | |
| Home Retail Group said profit margins at both units were squeezed, but for different reasons. | Home Retail Group said profit margins at both units were squeezed, but for different reasons. |
| At Argos, profits were hurt mainly by the shift in customer demand to lower-margin tablet computers - a problem also reported by Dixons Retail, the owner of Currys and PC World. | |
| Margins at Homebase were cut by more aggressive price discounts as part of the chain's clearance sales. | Margins at Homebase were cut by more aggressive price discounts as part of the chain's clearance sales. |