Argos owner snaps up Alba brands

Argos owner Home Retail Group today bought household names Alba and Bush from their struggling owner for £15.25m (€18m).

Elstree-based distributor Alba had planned to stop supplying both consumer electronics brands, but Argos stepped in to snap up the trademarks popular with customers looking for cheaper stereos and TVs.

The sale leaves Alba – which is changing its name to Harvard International under the deal – with the Goodmans brand and the right to distribute Grundig products in the UK.

The disposal comes amid collapsing sales of consumer electronics goods in an “increasingly challenging” climate, adding to Alba’s existing headaches.

Even before the current downturn, the firm was being hit by retailers attempting to buy more products directly from manufacturers, hitting margins at the value end of the market.

The Argos deal forms part of Elstree-based Alba attempts to reduce risk by shrinking the scale of the business, which posted pre-tax losses of £1.2m (€1.4m) in the six months to September 30.

This has already seen the disposal of its leisure division, which boasted kitchen equipment brands Breville and Hinari, for £51.5m (€62m) last year.

Shares in Alba jumped as much as 70% today as the firm also announced plans to return £15.4m (€18m) of the proceeds to investors.

Chairman Bridget Blow said: “As part of Alba’s ongoing reconstruction the board has been considering how best to release the value held in the group’s assets and brands for shareholders.

“We believe that the sale goes a long way to achieving this whilst allowing these famous brands to thrive under the ownership of Argos.”

Home Retail added: “The trademarks are household names with very strong heritage which have high awareness and purchase frequency with Argos customers.”

Alba is also pinning hopes on a growing medical electronics business, selling products such as blood pressure monitors and thermometers.

But the company has cut 200 jobs over the past year and Ms Blow warned returning the company to healthy profit “would not be easy”.

“It is therefore likely that the benefits to be accrued from the group’s restructuring will only start to emerge once market conditions improve,” she added.