Argos to shut or relocate 75 stores, Home Retail Group says
Home Retail Group, which owns Argos, is planning to close or relocate at least 75 of the catalogue retailer's stores over the next five years.
It is part of the company's plans to change Argos into a digitally-led retailer instead of being predominantly catalogue-led.
It plans to move its stores onto shorter leases to make relocation easier.
Argos has more than 700 stores in the UK and Republic of Ireland.
It expects 10 store closures in the current financial year and no openings.
Home Retail Group summarised the key challenges facing Argos, including: "The Argos offer is biased towards less affluent customer segments".
Following a six-month review of the Argos business, it has decided to invest in developing a bigger range with universal appeal and a stronger online presence.
Among the plans for repositioning Argos as a digital retailer will be upgrading its computer systems to "collect customer data on a large scale".
The stores will be focused on pick-up and customer services, with computers instead of catalogues for ordering and wi-fi to allow customers to order from their smartphones in-store.
The first digital catalogue will be launched before Christmas, with trials of smaller printed catalogues, offering an edited selection of products and pointing customers towards the website for the full range.
Home Retail Group is aiming to increase sales at Argos to £4.5bn a year by 2018, compared with £3.9bn in 2011-12.Market 'fragile'
The announcement came with the release of Home Retail Group's six month results. Pre-tax profits for the six months to the start of September came in at £51.1m, up 74% from the comparable period last year.
But that figure was flattered by an exceptional £35m gain from the retailer reducing its future liabilities by closing its final salary pension scheme. Stripping out that gain and other one-off items, profits were down 37% to £17.9m.
Home Retail Group also owns Homebase and Habitat. It bought the rights to the Habitat brand, as well as three of its stores, in June 2011.
Like-for-like sales at Argos were up 0.6% in the six month period, but were down 6.2% at Homebase which was hit by the poor weather over the summer.
"Market conditions remain fragile and hence we will continue to plan cautiously, however we are in good operational shape as we approach our peak trading period," said chief executive Terry Duddy.