Saturday 24 February 2018

Anxious times for workers as some Argos stores to close

Colm Kelpie

Colm Kelpie

€124m

What Argos plans to invest over each of the next three years to revamp its business

THE parent company of retail giant Argos would not say if its Irish outlets will be affected by plans to close or relocate at least 75 stores over the coming years.

The move is part of a five-year transformation plan being carried out by Home Retail, which will see Argos being reinvented from a catalogue-led business to a digitally led one.

Of the 740 Argos stores, 40 are located in the Republic of Ireland and 27 in Northern Ireland.

Home Retail is planning a digital catalogue before Christmas, envisaging that circulation of its traditional glossy version will dwindle thereafter.

It has been a mainstay on coffee tables of many family homes, particularly in the run -up to Christmas.

Home Retail would not say how many staff it has, stating it did not feel that it was appropriate to give a headcount.

The details were announced as part of the retail chain's half- year results, which revealed sales were down 1pc to £2.53bn (€3.12bn).

A spokeswoman said: "We are committed to national/local spread of stores. We cannot give details of individual stores which may be affected by this because it will depend on lease negotiations at the time."

Home Retail group Chief executive Terry Duddy admitted there may be some job losses at the affected stores.

He said about 40pc of sales are driven by the internet, increasing to 75pc at the end of the five-year plan.

The strategy follows a six-month review led by the division's new managing director John Walden to try and come up with ways to revive the business.

Argos will develop digital catalogues with the first launched before Christmas, with circulation of the traditional catalogue set to decline. The company said it would move into a supporting role.

It stated that Argos is likely to close or relocate at least 75 stores as their leases come to an end over the next five years.

Mr Duddy said its business review of Argos highlighted an opportunity to transform the business through increased investment in digital technologies.

Transformation

"The transformation plan aims to deliver growth by repositioning Argos as a digitally-led business from a catalogue-led business, leading the market growth of digital commerce through online, mobile and tablet, and offering customers more products with the fastest, most convenient fulfilment options," he said.

"This plan provides the right approach for Argos to achieve a long-term sustainable performance and profit recovery."

The five-year plan for Argos is targeting £4.5bn (€5.6bn) of sales by 2018, up from the £3.9bn in 2011-2012.

The firm would invest £100m (€124m) a year in Argos over the next three years to achieve this, mainly on IT infrastructure, raising group capital investment to £525m ( €649m) over the period.

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