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The week ahead: Home Retail Group to report on trading

Home Retail Group logo

THE revival of one of Britain’s best-known high-street brands will motor on this week when Argos reports a jump in profits.

The business, once famous for its laminate catalogues, is in the process of remodelling itself as an online retailer, with its stores used as click-and-collect hubs.

Its £300m, five-year plan led by American boss John Walden involves opening small shops at travel hubs, allowing eBay customers to collect their orders from stores and launching new brands, such as homeware collection Heart of House.

The early impact of the plan should be evident when Home Retail Group, the company that owns Argos and Homebase, reports annual results on Wednesday. City analysts expect the group to reveal a 13pc increase in profits before tax to £130m and a 15pc rise in operating profits.

However, Homebase will suffer a fall in profits as it battles a tough DIY market. Last year, Home Retail (Other OTC: HMRLF - news) unveiled plans to close one in four Homebase shops. It is opening Argos concessions within its DIY stores in an attempt to boost the beleaguered brand.

Analysts at HSBC said Argos was becoming the “digitally focused, ‘local’ retailer of choice”. They added: “Management expects 75pc of Argos sales to be online by 2017 and is repositioning the Argos business model to capitalise on mobile shopping trends and click-and-collect, for which a widened range of ‘must-have’ products, and superior fulfilment, are key.”

Source : Graham Ruddick - The Telegraph via Yahoo

27 April 2015

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