Argos group dives £437m into the red
THE head of Argos and Homebase-owner Home Retail Group said 2008 was one of the toughest periods since the catalogue retailer began 35 years ago.
Chief executive Terry Duddy said he had never experienced so little clarity on the outlook for the business in the run-up to the busiest time of the year.
“Since the start of September, trading has been difficult and volatile. It’s been all over the place,” Duddy admitted.
He said families might cut back on Christmas presents for adults, but added: “I don’t think they’ll trade down for the kids.”
Home Retail reported a pre-tax loss of £437million for the six months to the end of August, against a profit of £114million.
Sales were steady at £2.7billion but underlying profits were down 19 per cent to £121million and the group was forced into the red by writing off £542million against the value of Homebase.
The DIY chain has been hit by the downturn in the housing market, with underlying sales down more than 10 per cent.
Underlying sales at Argos — celebrating its 35th anniversary — dipped 3 per cent and have fallen further since August.
Argos, which typically generates half its yearly sales in the run-up to Christmas, is fighting back with a promotional campaign highlighting its “inflation-beating” prices.
It has extended its range of value items, including a landline telephone for £2.86 and a toaster for £3.75.
Analysts have trimmed full-year profit forecasts from £350million to £327million.
Its shares rose 2fp to 196fp.