Argos Overhaul Could See 75 Stores Shut
Argos has said it will close 75 stores in the UK over the next five years as it unveils a transformation plan for the business.
The retailer's parent company, Home Retail Group, made the announcement as it reported a 37% fall in group pre-tax profit to £18m in the six months to the start of September.
Argos made only £3.3m during the period.
Home Retail said it had reviewed Argos' 739 stores on the basis of several factors, including profitability and attractiveness of location.
"As a result, it is likely that Argos will close or relocate at least 75 stores as their leases come to an end over the next five years," the company said in a statement.
A review of the business highlighted a "clear opportunity" to invest more in digital technologies, Home Retail Group's boss said.
It will also reduce the circulation of the traditional Argos catalogue, which was launched in 1973.
"The transformation plan aims to deliver growth by repositioning Argos as a digitally-led business from a catalogue-led business, leading the market growth of digital commerce through online, mobile and tablet, and offering customers more products with the fastest, most convenient fulfilment options," chief executive Terry Duddy said.
"This plan provides the right approach for Argos to achieve a long-term sustainable performance and profit recovery."
The company said it was aiming for £4.5bn of sales for Argos by 2018 and would invest £100m a year in the business over the next three years to achieve this.
Home Retail Group's shares rose more than 8% in morning trading following the announcement.
But Neil Saunders from retail analysts Conlumino said a big question mark remains over the sustainability of Argos' business model.
"On the surface, its review looks sensible and has credibility," he said.
"However, executing the strategy will not be easy and there are a number of challenges Argos will need to address."
He said the company will have to create a superior digital experience for consumers, make sure it remains high in shoppers' minds, and has a unique edge to its product mix.
It came on the day Sky sources said Ford was planning to close its Southampton factory as part of its restructuring in Europe - in another damaging sign about the state of the economy.
what do you think?
Odd how the so called cheap stores are doing badly through this recession,woolworths, argos, etc and second hand shops are doing well, yet stores like marks and spencers are doing reasonbly well.doesnt that say something about the ever dividing class system in this country at the moment.
Spot on Shaun, it just goes to show where austerity is hitting the hardest and where there is still disposable income. If you had a small ammount of disposable income when austerity hit then that is probably gone, if you had medium disposable income then that has probably reduced, if you had a large disposable income then you probably don't even notice austerity. Then there are the people who we should really think about, those who never had a disposable income and probably never will have the opportutnity to get one. The more right wing readers of this post will say its their own fault .
Im glad you get my point john.most on here can afford computers .there only complaining about how they havent got their goods using computers.what about the poor who have to bus it into town.
Marks and spencers groceries is what keeps them alive.
Yes you might be right ali.marks nearly went bust themselves. Even so their expensive groceries and their making good money now.
Meinir Mai Hughes
It wud help if argos had things in stock !!!!
Maybe if they fixed their online business they might make some money, I tried to purchase an item and their website wouldn't let me.
ive had the same problem a few times tried buying online and either the site froze or timed me out if they want to improve the online sales then they need to do some major work on the online side
Yes John, I've had a few like that. You try to give them money but they won't let you !
Finding it har to compete with online buying. Poor management who should have changed their business model many years ago
Trouble is the less well off cant afford a computer or pay another monthly subscription for broadband.though this is going to be the future the less well off need to be able to keep up is well.
Let them eat 56k dial-up:)
I agree with Mick, poor business model. They sell everything, but you don't get to see it ! Might as well go online and have it delivered to your door. Wouldn't get any investment in Dragons' Den, I'm out !
It's a handy little shop. Maybe it was time they slimmed down and tightened there ship. As a lot of their stores look run down.
Its true they proberly will slim down, hence this annoucment, but you can guarentee the stores will close down in the poorer areas and not in the more affluent where computers are commonplace
shaun, Argos must have started this process some months ago as they closed the small satellite store in our town.
Amazon the tax avoidance company is doing a lot of damage to well run taxpaying British companies who cannot compete .
Exactly , personally that is why I avoid giving the likes of Amazon my business, even if they can supply a little cheaper I prefer to buy locally everytime. HMRC should come down on these evaders like a ton of bricks.
More empty shops on the high street x
Damn, now that's annoying. I am gonna have to keep my purchases, instead of using them for a weekend or a few days and taking them back for a full refund within 16 days. Better get that Gas BBQ back pronto, that I bought last week after hearing the weather forecast:)
Another example how internet shopping is killing the high street, in 10 years time shops on the high street will be a thing of the past unless its a loan or pawn broking shop
THIS is the real cost of austerity ....................... job losses for the ordinary people ....NOTE . NOT FOR THE BOSSES !!
Does anybody think the public sector will come out in sympathy,it's no good people complaining if they shop on line
This is the brave new world, soon there will be a law passed, ordering all people to order on line, or be taken into custody