Published on 22 - October - 2008

News

Homebase has reported a like-for-like sales drop of 10.3% for the 26-week period to August 30.


Not great news for parent company Home Retail Group, considering the DIY giant's figures were already down 2.5% in 2007. Its total sales also saw a decline of 2.9%, despite a 7.4% contribution from new stores.

The chain's seasonally-related categories, which account for around 40% of Homebase's product mix in Q1, experienced one of the worst lfl declines of approximately 20%.

Sister company Argos also suffered with lfl sales down 3% and total sales up 1.1%, with a 4.1% contribution of new store space. The company saw declining sales in furniture and homewares and described trading in seasonal categories as 'difficult'. It did, however, see market share gains and sales growth in consumer electronics categories.

Home Retail Group has reported a pre-tax loss of £437m and warns that profits could slump to the bottom end of the market by the close of 2008. The group's total revenue of £2,737m is level with the same period last year.

All seems to be resting on the company's peak trading period in November and December and, according to Home Retail Group chief executive Terry Duddy, if the challenging conditions continue through this period, the profit outcome for the year is likely to be 'around the bottom of current market expectations'.

However, it appears that there has been an effort to take as much bad news as possible into this half, with the operating loss of £450m reflecting exceptional charges including Homebase non-cash asset write downs and onerous lease provisions of £542m.

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