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October 25 2007
Argos keeps home (retail group) fires burning
In flagrant disregard for our predictions of consumer doom and gloom, The Home Retail Group (parent of Argos and Homebase) has posted slump-defying results: sales up 3.0% in total to £2,7bn with like-for-like sales up 1.4% at Argos and down 2.5% at Homebase.
The full results are available on the Home Retail Group's site - they make for impressive reading, including the increase in operating profit of 34% to £136m.
Terry Duddy, Chief Executive of Home Retail Group, commented (or should that be "chortled"?):
"The Group has performed very strongly in the first half, both from an operational and financial point of view. There was a particularly good result at Argos with profit growth of 50%, while Homebase grew profits by 12% despite some difficult market conditions. Although we remain cautious given the uncertain consumer outlook, as we move into the key seasonal period both businesses continue to enhance their customer offers, while also benefiting from the leverage of our shared group operations."
So there you have it: a small nod to the fact that everyone else is called "slump" yet HRG is extending its customer offer (it's just published its largest ever catalogue) and is squeezing every pip in its supply chain.
The report states:
Lower prices continue to be funded by the growing scale of the business and its ongoing supply chain initiatives.One could make a few noises about there being a limit to how much one can squeeze from the supply chain - especially as China and other Asian manufacturing nations are starting to experience wage and cost inflation themselves - but it'd be a particularly curmudgeonly analyst to begrudge HRG congratulations on their achievement, especially in the face of the prevailing gloom.
Ian Jindal
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