skip to main content
  • *
  • *
  • *
Find Insight DIY on
* * *


Retailers retreat as traders see red

High street chains were in the doldrums as another wave of selling engulfed equities, fuelling the benchmark index’s biggest sell-off since November 2008.

Home Retail Group was among those on the wane as analysts at Seymour Pierce turned bearish on the owner of Argos and Homebase, arguing that a “strategic shake up [is] needed” in the face of economic pressures and a move to internet shopping.

Back in June, Home Retail said that fearful shoppers had dramatically cut purchases of electrical goods, adding to concerns of a fresh downturn in consumer spending.

That was on the minds of Seymour Pierce analysts, who said: “It is hard to see core categories such as electricals, which account for c.50pc of sales, or homewares and furniture making a decent contribution to earnings.”

The broker argued that these products have been adversely affected by factors such as competition from food retailers and specialist stores developing their multi-channel offering.

“It is hard to see a reversal of fortunes for the group over the medium term unless there is a restructuring of the Argos portfolio combined with a re-think on strategy,” said analysts.

With the balance sheet “becoming more stretched”, they believe that management will have to consider a possible closure of some of Argos’ 750 stores, a rethink of its product lines and a review of the twice-yearly catalogue model.

Seymour Pierce cut its stance to “hold” from “sell”, helping send Home Retail down 8½ to 124.7p.

Source : Rachel Cooper – The Telegraph

18 August 2011
view more UK DIY News

Insight DIY always publishes the latest news stories before anyone else and we find it to be an invaluable source of customer and market information.

Max Crosby Browne - CEO, Home Decor

Don't miss out on all the latest, breaking news from the DIY industry