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Homebase sales slip 3.9% LfL due to big-ticket weakness

Published: 17 January 2013
Home Retail Group announced a raised profit forecast in its interim management statement this morning, but it was strong sales from Argos, not Homebase, which bolstered the home improvement giant's third quarter.
Homebase sales slip 3.9% LfL due to big-ticket weakness
Argos boasted a sales uptake of 1.6% and a like-for-like increase of 2.7%, bringing revenue to £1,744m for the 18 weeks to January 5, 2013. Meanwhile, DIY retailer Homebase did not fare so well, with sales down 4.5% (3.9& LfL) at £453m.

The group's benchmark profit before tax for this financial year is now expected to be around £10m more than the current market consensus of £73m.

Homebase saw the closure of three stores during the period, reducing its total closed space by 0.6% and bringing store numbers to 337. Bosses blamed "the continued weakness in big ticket sales" for its LfL sales decline. The retailer saw an approximate 50 bps gross margin decline, principally driven by increased clearance activity.

Internet sales at Argos were revealed to now represent 42% of its total sales, and mobile commerce sales grew by 125% during the 18 weeks.

HRG chief executive Terry Duddy said: "Whilst we anticipate consumer confidence will remain subdued in the coming year, we are focussed on delivering the transformation plan to reinvent Argos as a digital retail leader and the ongoing development of the Homebase proposition."

Comments

Published prior to March 2014
By RussRB
There will be an element of lower Big Ticket sales, but there is another element that they have not said, people are smarter theses days in the way they shop, poor and inconsistent design advice across their estate has a part to play in their lower sales figures.

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