Too early to say if Irish Argos stores included in wider closures

Sainsbury’s will shut most of its standalone Argos stores in the UK — and most of its Irish outlets are standalone.

Sainsbury's is looking to close 420 Argos stores

It is too early to know if Ireland will be affected by Sainsbury’s plan to close more than 400 Argos stores.

The UK supermarket group is closing 420 Argos stores — most of which are in Britain — and starting a massive job-restructuring plan in the midst of the pandemic in a bid to boost its profitability.

Sainsbury’s bought the catalogue goods retailer four years ago. 

There are currently around 60 Argos stores on the island of Ireland. 

A Sainsbury’s spokesperson said the company is “in the process of reviewing our estate”, but has not arrived at a list of stores closing.

Overall, Sainsbury’s — which ranks as the UK’s second-largest grocer behind Tesco — plans to cut as many as 3,500 positions, though job losses should be limited as it also creates 6,000 new roles.

It will shut most of its standalone Argos stores in the UK and instead add counters or collection points at every Sainsbury’s location. 

However, most of Argos’ shops on the island of Ireland are standalone, with Sainsbury’s only having a small eponymous supermarket presence in the North.

Sainsbury’s will book a £438m (€486m) charge as a result of the restructuring. Excluding that, pre-tax earnings should rise at least 5% on an underlying basis this fiscal year, the grocer forecast.

Sainsbury’s said it expected its new plan to drive an inflection in underlying profit momentum, with pre-tax profit in the year to March 2022 forecast to exceed those reported in the year to March 2020, which were not impacted by Covid-19.

The group reported a loss before tax of £137m for the 28 weeks to September 19, reflecting £438m of one-off costs associated with the Argos closures and other strategic changes.

Shoppers carrying purchases from fashion retailer Superdry. Picture: Steven Paston/PA Wire

Separately, clothing retailer Superdry has posted lower first-half revenues, with coronavirus-led measures hitting traffic in stores, while the fashion retailer prepares to shuts its stores for a second national lockdown in England.

The company, which sells sweatshirts, hoodies, and jackets featuring Japanese text, said revenue fell 23.3% for the six months to the end of October.

Meanwhile, there has been a marked improvement in the mood of company finance directors across Europe, according to a survey from Deloitte.

As much as 50% of them feel more optimistic about their company’s financial prospects than was the case three months ago. That percentage stood at just 10% in March, at the start of the Covid crisis.

Furthermore, 30% of European CFOs expect their revenues to drop over the next 12 months, down from 60% in March.

“While CFOs across Europe are generally optimistic, the fact remains that Brexit will have a unique impact on Ireland and remains a significant risk factor for companies across all sectors here,” said Deloitte Ireland partner Daniel Gaffney.

• Additional reporting Bloomberg and Reuters