As recently as two years ago, Argos and Homebase were struggling to overcome financial difficulties in the face of the recession, with consumers unwilling to spend on anything other than essentials. In fact, there were those who predicted Argos to become one of the biggest casualties on the high street, following chains such as Woolworths and HMV into administration.
Fast forward to 2014, however, and the trading figures released by controlling firm Home Retail Group paint a very different picture. Following a successful Christmas trading period, the group released a statement predicting that full year profits will come in at the top end of the £90 million – £109 million prediction made by analysts at the start of the second half of the year.
In the 18 weeks to the 4th of January, like for like sales at Argos climbed by 3.8 per cent when compared to the same period in 2012. Homebase, meanwhile, posted an even more positive 4.7 per cent rise – highly impressive given a large number of products available at the chain’s stores are geared towards gardening and the outdoors.
Towards the end of last year, the group announced that current chief executive Terry Duddy will be stepping down from the role, having successfully turned around the fortunes of both chains under his command. He will be replaced by present head of Argos John Walden, although a date for the change has not yet been revealed.
Mr Duddy praised the performance of both Argos and Homebase over the festive period, stating that strong results had been achieved “despite a challenging consumer environment.”
He continued; “In its peak trading period Argos has continued to grow internet sales, which now represent nearly half of total Argos sales.
“This growth was supported by a strong performance in mobile commerce sales which represented 20 per cent of total Argos sales in the period – this gives further reinforcement to our plan for Argos to become a digital retail leader.”
Argos’ click and collect service, known as “Check & Reserve”, has largely been credited with the impressive turnaround of the past 12 months. This Christmas, the service was particularly useful for those ordering tablet computers, televisions and video games – the items most in demand this year.
It also went a long way in helping the growth of internet sales, which rose from 42 per cent of total sales to 46 per cent year on year.
Homebase, meanwhile, has bounced back admirably from the effects of the unpredictable weather during the summer of 2012, partly due to the Indian summer experienced in 2013. The chain is currently running a programme of refurbishments in its nationwide stores, hoping that the more concise layouts will further contribute towards growth this year.
With Home Retail Group fast becoming one of the high flyers of the high street once more, it will be interesting to see whether the exit of Terry Duddy will have an effect upon the progress made over the past 18 months.
