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Home Retail hit despite gains from rivals’ demise
Robert Lea12.03.09
Shares in Home Retail Group were plunging toward new lows today, off 16p at 188p, as the Argos and Homebase group admitted it would be doing a lot worse but for the demise of Woolworths and MFI.
Home Retail said it expects underlying profits to crash 26% to around £320 million for the year to the end of February — though the company will plunge deep into the red after it lifted total writedowns in the value of its businesses to £643 million.
Despite slashing prices to keep up demand — its profits margins have dived by 1.25% at Argos and 1.75% at Homebase — sales have continued to plunge.
Argos like-for-like sales are down 4.8% for the year though the post-Christmas period was better with a fall of only 1.6%.
Like-for-likes at Homebase, however, continue to crater and are down by more than 10%.
“January was very good for Argos and we saw good sales of video gaming and traditional toys — something in which we benefited from the closure of Woolworths,” said chief executive Terry Duddy.
The cold winter ruined Homebase's garden business but Duddy added: “Kitchens sales have been going well and we have been picking up market share after the demise of MFI.”
