Argos cashes in on online sales

The enormous catalogues may soon be no more, as the Home Retail Group-owned chain reported mobile sales jumped 89%.

by Rachel Savage
Last Updated: 07 Oct 2015

The death of the catalogue continues, but that doesn’t seem to be harming Argos and Homebase owner Home Retail Group. The retailer said it expects pre-tax profit for the year to March 1 to be slightly more than the current market forecasts of £107-£111m.

The switch away from doorstopper catalogues to online retail appears to be progressing. Argos’ online sales accounted for 44% of the total, up from 42% the previous year. Not a stonking rise, but mobile sales rocketing 89% to make up 18% of sales was a tad more impressive.

Argos’ total sales rose 5.2% to £526m in the eight weeks to March 1, ahead of forecasts of 1.8%. The hot housing market (which may actually be cooling off somewhat now) helped DIY chain Homebase’s sales climb 6.9% to £203m in the same period, boosted by people snapping up ‘big ticket items’ (i.e. kitchens) for their homes.

Looks like Home Retail Group, which will be led by current Argos chief exec John Walden when retail veteran Terry Duddy turns off his till later this month, might have finally turned the corner then. Last financial year profits fell 10% to £91m, a sorry sight compared to the £433m it raked in in 2008.

One sore spot for the retail group, however, was an extra £25m added to the provision for selling Payment Protection Insurance to customers (it’s not just the banks that may have missold PPI then…), although it didn’t say what the total it has now set aside is.

However, given that the trading update was largely positive, investors may have more to look forward to when Home Retail Group releases its full year results at the end of April. As long as any shareholder giveaways don’t include any of Argos’ super stylish sterling silver jewellery

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