The new head of the Argos catalogue chain has launched a major review of the struggling business, fuelling speculation about large numbers of store closures. John Walden, who joined Argos as Managing Director in February, has drafted in OC&C Strategy Consulting to assist the review, which is thought likely to lead to a root-and-branch overhaul, according to press reports.
Some analysts expect Argos to close many of its 748 stores after months of dire trading as it struggles to compete with online rivals and the supermarket multiples. The news comes days before Home Retail Group, which owns Argos and Homebase, reports full-year results on Wednesday - which are expected to reveal a 60% slump in annual profits.
Walden, an American who has worked for US retailers BestBuy and Sears, is thought to be examining all areas of the business, including its branding and high street presence. It is understood that the review will take some weeks to carry out and no further details are expected at Wednesday's results.
Home Retail has denied it has plans for widespread closures despite its last update revealing an 8.5% fall in Argos' like-for-like sales in the eight weeks to 25 February, driven by weak demand for TVs and a 35% slide in sales of video games as rivals slashed prices. The chain opened one new store and closed 12 in the period as leases expired and said a further 35 leases would come up for renewal in the next year.
Homebase, which has 341 outlets, has also suffered difficult trading as it has borne the brunt of low demand for big-ticket items such as kitchens, bathrooms and furniture.
The group is expected to unveil pre-tax profits of £100m on Wednesday, less than half the £254.1m reported last year. Its share price has plunged more than 50% in the last 12 months as it continues to publish weak sales updates.
NamNews - Tuesday 1st May 2012