DIYWEEK.net

Argos maintains momentum, Homebase continues sluggish performance in the 18 weeks to January 5, 2008.
Argos maintained its progress in what Home Retail called a 'challenging environment' due to strong trading in the run-up to Christmas – and leaves the group 'well-positioned' to weather an 'anticipated consumer slowdown'.

The multi-channel retailer was helped by a surge in sales of electronic goods as furniture and homewares categories suffered.

Total sales at Argos were up by 2.5% to £1.92m in the 18 weeks to January 5, 2008.

Like-for-like sales were down marginally at 0.2%, with new stores contributing sales growth of 2.7% to the mix; 17 new stores were added and two were closed, taking the portfolio to 700.

Gross margin was approximately flat against the same period last year.

Operationally, highlights for Argos included the internet as an order channel, which grew by one-third to account for 23% of all Argos' sales.

Internet 'Check & Reserve' orders for store collection accounted for 15% of the 23%, growing by almost 50%.

Tough times

However, despite Argos' momentum chief executive of Home Retail Group Terry Duddy has braced himself, and shareholders, for tough times ahead as he said sales in the short term will he harder to come by, particularly at Homebase.

The diy retailer saw sales decline 4.1% to £498m in the period, with like-for-like sales dropping 6.3%. Gross margin rose by 200 points.

Home Retail said continued growth in kitchens helped the big-ticket category, which saw 'overall positive growth', although sales of bathrooms saw a decline, and furniture sales have become difficult.

New stores contributed sales growth of 2.2%; nine new stores were added and two were closed, with the store portfolio as at January 5, 2008 standing at 320; in addition, two of the 27 stores acquired from Focus DIY in October 2007 were launched at the very end of the period.