HOME RETAIL Group’s chief executive said the high street “is not dead” and there was a place for bricks and mortar retailers in an internet age as the Argos and Homebase owner posted a slump in full-year profits.
Terry Duddy said despite the threat of the internet to the high street, it was not to blame for the recent collapse of retailers Comet and Jessops.
“They closed for different structural reasons, corporate structural reasons, and macro-structural,” he said.
Duddy’s comments came as the group said plans for turning Argos from a catalogue to a digital retail business were on track, with sales rising for the first time in five years.
Like-for-like sales grew 2.1 per cent in the 52 weeks to 2 March, following an 8.9 per cent decline last year, driven by demand for tablet computers.
Home Retail’s underlying pre-tax profits fell 10 per cent to £91m down from £102m the previous year.
The group will spend £175m a year for the next three years transforming Argos and refitting Homebase stores.
The DIY chain posted a 4.9 per cent slump in like-for-like sales, dampened by poor weather conditions and weak consumer spending – both delayinghome improvement projects.
One institutional investor voiced his confidence in Argos but told City A.M. “there are some issues at Homebase” that have held back the group.
“The DIY market in the UK there is over capacity. Homebase is quite some way behind B&Q in terms of its offering to customers,” he warned.