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Weakness in big-ticket drives Homebase LFLs down 6.5%

Published: 15 March 2012
Homebase reports tough start to 2012, as sales for the eight weeks to February 25, 2012 drop to £195m.
Weakness in big-ticket drives Homebase LFLs down 6.5%
Total sales at Homebase declined by 6.2% for the period, continuing in a downward trend, with sales for the full 26 weeks ended February 25, down 3.6%.

The like-for-like sales decline for the last eight weeks has been attributed to an ongoing struggle to get consumers spending on high-ticket items, while a gross margin increase of 175 basis points was driven by a stronger focus on stock management.

Overall, sales for the full year were down 2.6% to £1,510m, falling 2% on a like-for-like basis.

Home Retail Group stablemate Argos had a tougher year, reporting a 7.7% sales drop to £3,873m for the year ended February 25, 2012, down 8.9% on a like-for-like basis. The catalogue retailer saw a similar decline in the final eight weeks of the trading period, with total sales down 7.7% and like-for-like figures recording an 8.5% decline on the previous year.

Argos closed 12 new stores in the eight-week period, reducing its store portfolio to 748. The like-for-like sales decline was blamed on weakness in the consumer electronics market.

Despite sales declines in both retail divisions, Home Retail Group chief executive Terry Duddy believes the group's benchmark pre-tax profit for 2011 will be in line with current market expectations and feels the company is "in good operational shape", as it moves into its new financial year.

He added that the group will be prioritising investment in the development of its multi-channel capabilities.

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