We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedFinancial Planning

Home Retail posts 60-percent profit slump

Argos owner's mainly low-income customers have suffered most in the economic downturn

Article comments

Argos owner, Home Retail, reported a 60-percent fall in profits on Wednesday, and announced it was cutting its dividend as consumers continue to feel the squeeze on their budgets.

Home Retail, which also owns DIY chain Homebase, said it remained cautious about the consumer outlook and warned it is operating in a particularly difficult trading environment.

"Prospects for the 2012/13 financial year remain uncertain as consumers' disposable income is impacted by ongoing inflationary pressure, together with low levels of consumer confidence," Home Retail's chief executive Terry Duddy said.

The company said it was likely to close 10 Argos stores over the next financial year, relocate several more to better locations and focus on selling goods to customers via multiple channels, including through mobile phones and the internet.

The group made an underlying pre-tax profit of £102 million in the year to 25 February.

Total sales fell 6 percent to £5.49 billion, with sales at Argos stores open over a year down 8.9 percent and like-for-like sales at Homebase stores down 2.0 percent.

Many retailers are struggling as consumers' disposable incomes are squeezed by rising prices, muted wages growth and government austerity measures, and as they fret about job security and a shaky housing market.

Argos has been particularly hard hit because its mainly low-income customers have suffered most in the economic downturn and because it also faces stiff competition from supermarket chains, specialists and internet players like Amazon.



Home Retail posts 60-percent profit slump
Financial Planning

Budget: What business wants

Budget: What business wants

CFOs are keen for the chancellor to avoid any uncertaintymore ..

Co-operative Group posts £2.5bn loss

Annual loss the worst in its 150 year historymore ..

Google sees 19% rise in Q1 revenue

However, company missed analysts' expectation as ad prices slidmore ..

Starbucks to move Europe HQ to UK

Coffee chain says move reflects growing importance of UK marketmore ..

Stay ahead of the curve

CFOs used to low interest rates ignore working capital optimisation at their perilmore ..

Digital streamlining of travel and expense claims [Part II]

Concur shows CFOs how to make life easier when the auditors come knockingmore ..

Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..


* *