Variety store & catalogue retailer Argos is to embark on a ‘radical overhaul’ of its business which could see many stores shut, according to reports today.
The Daily Telegraph claims that new Managing Director of Argos John Walden has hired OC&C Strategy Consultants to conduct a thorough review of the retailer’s operations, which is likely to suggest store closures and a revamp of remaining outlets.
Walden joined the Home Retail Group (HRG) owned business just two months ago from US-based electricals specialist Best Buy but it is claimed that he has already started with his business review.
Tomorrow sees HRG announce full-year results but no details are expected to be disclosed on the review being undertaken by Argos or on any findings that may have been made.
In January HRG announced that a “significant cut” in full-year dividends was to be expected by shareholders after underlying sales at Argos plummeted 8.8 per cent year-on-year and the retailer’s gross margin dropped 50 base points in the 18 weeks to December 31st 2011.
Argos currently operates more than 700 stores, and with the rise of multichannel shopping continuing apace, many major non-food retailer are currently undergoing a scaling down of their costly property portfolios to focus more attention on their online offer.
In the last financial year Argos closed as many as 12 of its stores, further reductions will prove difficult however as it is understood that many of its shops are only mid-way through their current lease agreements.
Despite the retailer’s prolonged trading slump, Group CEO of HRG Terry Duddy said in September 2011 that the retailer’s own internal research suggested that its strategy was right and that he had no intention of mass store closures in the immediate future.
Duddy said at the time: “Our view looking forward is we think we can grow our store estate further. The thing that we’ve got to do is not just be great in the markets that we’re in but get into new markets,”