Argos warns of shop closures after suffering sharp drop in sales

Argos has warned of store closures, after suffering significant sales declines last year, but it is too early to know if its Irish operations will be affected.

The high street catalogue-focused retailer operates 40 stores in Ireland, employing 1,300 people. The chain, yesterday, reported sales of just under £3.88 billion (€4.77bn) for the 12 months to the end of February; 8.9% down on the previous year. Operating profit was down by 57%, however, to £94.2m. There was no breakdown in terms of Irish performance.

On the back of the results, Terry Duddy — chief executive of Home Retail Group, which owns both Argos and Homebase — said that it is likely that up to 10 Argos stores will close over the next 12 months.

A spokesperson for the company added that Argos does not have a widespread store closure programme currently in place and only closed three stores from its near 750-strong total shop network last year. They could not specify where further closures may occur.

“Argos will focus on optimising its store network by relocating — or closing — some older stores and opening some new stores, if attractive sites become available. In the current financial year, there are around 10 stores that are likely to be closed; there will also be a number of additional stores that are relocated to better sites,” Mr Duddy said.

On a group-wide basis, Home Retail Group said that sales fell by 6% — to just under £5.5bn — last year, but that pre-tax profits were down by 60% to £102m.

Mr Duddy said that prospects for the current year “remain uncertain, as consumers’ disposable income is impacted by ongoing inflationary pressure, together with low levels of consumer confidence.”

Meanwhile, another high street giant with a significant Irish presence has reported growth.

Next said, yesterday, that total sales for its first quarter (up to the end of April) grew by 1.4%, year-on-year. The company added that full-year sales should grow by between 1% and 4%, earnings per share should be ahead by between 4% and 13% and pre-tax profits are likely to come in at between £560m and £610m.