Home Retail Group, owner of retailers Argos and Homebase, has slumped to a first-half loss of £437m and reported a 19% fall in profit. The company blames the poor summer and the economic downturn.
In its half-year results to August 30, Home Retail Group has reported that like-for-like sales dropped by more than 10% at Homebase and by 3% at Argos. The company adds that sales have fallen by “high single digits” since the end of August and predicts the situation is unlikely to improve “for some time”.
It adds that an exceptional charge of £549.9m related to write-downs has affected its figures. The first-half loss compares with a profit of £169.3m the same period last year.
The group says shoppers are buying cheaper electronic goods at Argos, cutting profit margins and that DIY and garden retailer Homebase has been hit by the poor summer and the slump in the housing market.
Capital expenditure will be cut in the current year to £175m from £225m. New store openings for Homebase will be reduced from between a planned 10 to 15 to between five and 10, while Argos’ new openings will be reduced from 30 to 25.