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Combined IT will deliver £20m in benefits for GUS

Daniel Thomas
Retail giant GUS expects to achieve cost benefits of £20m within three years by combining the infrastructure of its Argos Retail Group division with DIY retailer Homebase, which it bought for £900m last week.

Combining Argos Retail Group and Homebase - the third largest DIY chain in the UK - will exploit the existing ARG infrastructure and capabilities in e-commerce, supply chain management, logistics and financial services, a Gus spokesperson said.

The current Argos Retail Group brands, which include Argos and Reality, share many common functions, Gus said, including IT and e-commerce systems and home delivery and call centre operations.

Over time, the retail group said, Homebase will be able to take advantage of this existing infrastructure to increase revenue, particularly in e-commerce.

Gus identified opportunities such as developing a home delivery operation, enhancing Homebase's online customer services extending ranges and expanding the parent company's financial services offering to the DIY chain's active database of 4.3 million loyalty card holders.

Although Homebase will be highly integrated into Argos Retail Group's infrastructure, it will remain separate from Argos and the other brands as far as the customer is concerned, Gus said.

Homebase's chief executive, Rob Templeman and chief financial officer Chris Woodhouse will leave the new company in April 2003, but senior IT staff are expected to remain with the business.

The offer to buy Homebase is conditional on the acquisition not being referred to the Competition Commission following a review by the Office of Fair Trading.

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