Sainsbury’s has announced that its Argos chain will exit the Republic of Ireland, with the closure of all 34 stores.
Since acquiring the general merchandise retailer in 2016, Sainsbury’s has been closing standalone Argos stores in the UK, while opening outlets within its supermarkets. However, the group does not have a supermarket presence in the Republic of Ireland.
Sainsbury’s stated that the investment required to make the Irish wing of the chain profitable was too significant to be viable. Argos will cease trading in the Republic of Ireland by the end of June. However, its operations in Northern Ireland are not affected.
A spokesperson for Sainsbury’s said it had arrived at the decision to leave Ireland “following a long period of careful consideration and a thorough review of its business and operations in the country. Argos concluded the investment required to develop and modernise the Irish part of its business was not viable and that the money would be better invested in other parts of its business.”
In its most recent accounts, the company’s operation in Ireland reported a fourfold increase in pre-tax losses to €13.06m on sales down by 21.5% to €133.76m.
The figures included the costs associated with closing several stores, with the company cautioning at the time that it would “continue to review its portfolio of stores in light of the changing retail environment and the development of the company’s online offering”.
NAM Implications:
- Inevitable…
- …and with some obvious signalling along the way.
- Mainly down to interest rates everywhere rising to more practical levels…
- …after decades of near-zero levels via printed money.
- Payback time coming to a business near you…
- Why not run an incremental sales check on vulnerable customers?
- i.e. divide current sales outstanding by your net profit margin and multiply by 100
- = the incremental sales required to recover losses should a customer go bust…
