Argos sales slump leads to warning of dividend cut
HOME Retail Group chief Terry Duddy said he was not under shareholder pressure to resign after Britain's number one household-goods retailer warned that dire Christmas sales at Argos made a full-year dividend cut inevitable.
Duddy told reporters yesterday that he had met all of Home Retail's top shareholders after the firm posted a 70pc slump in its first-half profit in October.
"They are clearly disappointed with the overall performance but are not talking about those kind of (management) issues," he said, adding: "Many shareholders actually provided support, which I was grateful to receive."
Shares in Home Retail, which had already lost 57pc of their value over the last year, fell 4.7pc after the warning that its dividend would be significantly cut for the first time since it was listed in 2006.
The company also forecast underlying pre-tax profit around the mid-point of a wide analysts' range of £78m-£125m (€93m-€149m) for the year to the end of February.
With a "volatile and demanding" trading environment, sales at catalogue-based Argos stores that have been open for more than a year fell 8.8pc in the 18 weeks to December 31, with gross margin down 0.5pc.
A weak consumer electronics market, particularly in video gaming and audio, accounted for the reduction in sales.
"Every retailer has said so far how difficult next year will be, and we don't differ from that," said Mr Duddy.
With 40pc of Argos' sales now made over the internet and 10pc of internet sales made via smartphones, his strategy is to invest in a variety of purchasing options for customers. (Reuters)