Argos owner warns on profits as spending drops tat-too much

The struggling retailer has revised its profit forecasts down. Although we've got an ink-ling it won't dampen the spirits of one enthusiastic employee...

by Emma Haslett
Last Updated: 06 Nov 2012
With rising oil prices and higher food prices all putting a squeeze on consumer spending, it’s perhaps no wonder that Argos has had a tough few months. So tough, in fact, that the retailer’s owner Home Retail Group has issued a warning on full-year profits – revising forecasts down from January’s prediction of between £250m-£275m to a more modest £250m-£255m. It’s bad news for the chain – although, if the enthusiasm of one team-spirited employee in Essex is anything to go by, at least it can count on its staff for support…

It hasn’t been the best year for Home Retail Group. Last September lost its place in the FTSE 100, and things haven’t got much better since: according to the figures published today, like-for-like sales at Argos fell by 4.6% in the eight weeks to February 26, driven by a drop in the video gaming and audio markets.

Happily, the group’s top line has been bolstered by a slight rise in sales at its other chain, Homebase, where revenues rose by 3.8% - presumably because people are continuing to renovate and redecorate their houses instead of moving. But that wasn’t enough to prevent the profit downgrade. What’s more, the outlook for 2011-12 doesn’t seem to be particularly encouraging: apparently, the company is expecting the drop in Argos sales to be in the ‘low-to-mid single digit percentage’ during the financial year, while Homebase sales will be ‘broadly flat’. So it’s no wonder CEO Terry Duddy is apparently ‘planning with increased caution for the year ahead’.

But while customers are dwindling, at least Argos is engendering some serious loyalty among its staff. One employee has chosen to demonstrate his undying devotion to the cause by having Argos’ logo tattooed on his leg. Wayne Page, who has been a stock manager in the chain’s Clacton store in Essex for 16 years, says he got the ‘I heart Argos’ tattoo done in an effort to raise money for charity (although apparently a friend pointed out ‘they can’t get rid of you now’ – hmm, clever). Well it’s a step up from a sponsored walk, we suppose…

Finance Retail

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