Home Retail Group sells Homebase to focus on digital Argos

Parent firm Home Retail Group plans to offload DIY retailer Homebase to focus on the digital transformation of catalogue business Argos

Home Retail Group has announced possible plans to sell off Homebase to allow it to focus on its digital transformation plan for Argos.

The firm has been in talks with Australian firm Wesfarmers Ltd to sell the home DIY branch off, despite plans to pursue a digital transformation similar to that of Argos.

“We are in advanced discussions to sell Homebase, which would provide good value for shareholders and a growth opportunity for Homebase colleagues,” John Walden, chief executive of Home Retail Group, said.

“The transaction would allow the group to focus on Argos and its transformation plan, with an improved balance sheet and financial position, which I believe would represent an even greater opportunity for building long-term shareholder value.”

The recent digital initiatives put in place by Argos earlier in 2015 failed to boost sales over the Christmas period, with like-for-like sales down 2.2% from the year before for the period between August and January 2015.

But Home Retail Group also received an approach from Sainsbury’s to buy the group in a bid to accelerate Sainsbury’s multi-channel strategy.

In 2015 Argos opened 44 digital kiosks inside Homebase and Sainsbury’s stores to allow customers to order popular products for same-day pickup.

Argos saw growth in total sales as a result of the launch of its digital concessions in 2015, as well as an increase in digital sales as a result of the launch of its FastTrack services allowing customers to order products online for same-day delivery either to a specified location or to a FastTrack desk in a nearby store.

Sainsbury’s said Argos has “strong multi-channel capabilities and infrastructure” as a result of its digital offerings which would enable Sainsbury’s to offer more flexibility to customers through online, mobile and click and collect channels.

Sainsbury’s has recently invested a lot in innovation, research and development after opening a digital lab to focus on retailers use of technology online and in store.

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