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Home Retail's sales fall

Published: 11 September 2008
Argos and Homebase suffer at hands of consumer slowdown; group still expects to meet half-year profit expectations.
Home Retail's sales fall
Argos and Homebase have reported like-for-like declines for second quarter trading.

Total sales at Argos fell by 1.6% to £927m in the second quarter of the financial year.

Like-for-like sales declined by 5.8% in the quarter. Growth was positive in consumer electronics, but fell at a lower rate than the previous quarter. Furniture and homewares continued to show declining sales.

Online, 'Check & Reserve' (for collection) grew by more than 40%, with a further 9% of sales being internet orders for home delivery.

Total sales at Homebase declined by 0.3% to £389m.

Like-for-like sales declined by 8.3% in the quarter. Home Retail said seasonally-related categories performed 'broadly' in line with the company average.

Only last autumn's national rollout of the kitchen installation service was singled out for continued sales growth; all other product categories continued to see a generally difficult trading environment, Home Retail said.

The group added that it will write down Homebase's value in light of market conditions by 'several hundreds of million' pounds.
Estimates suggest the value could fall from £1bn to below £300m.

Terry Duddy, Chief Executive of Home Retail Group, commented: "The group's focus on cost control should result in benchmark profit for the half-year being in line with our expectations; the group has also had further good cash generation."

He added that profits for the financial year are dependent on the Christmas trading period.


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