Home Retail Group, a home and general merchandise retailer, today announced its results for the 52 weeks to 28 February 2015.
The company which owns both Argos and Homebase, saw positive like-for-like sales growth for both brands during the period. Like-for-like sales were up 0.6% at Argos, while Homebase witnessed a 2.3% rise.
The business puts its success (after a difficult few years) down to the ‘digital revolution’, which Chief Executive, John Walden says “continues to dramatically alter the way consumers communicate, learn, shop and are entertained”.
Internet penetration accounted for 46% of total sales including mobile commerce which grew by 38% to represent 25% of total sales.
Walden went on to highlight how ‘The Argos Transformation Plan’ will continue to be the group’s, “principal source of shareholder value over the medium term”. The plan was originally introduced in 2012 and is part way through its five year business strategy. Walden admits to, “minor delays and temporary customer disruption balance” but sees digital opportunities as the way forward.
Argos incorporated these digital capabilities into its FY15 plan, including a children’s app over Christmas which saw 70,000 ‘wish lists’ created. A ‘Christmas gift finder’ was used over one million times in the lead up to the holiday, providing customers with gift suggestions.
Argos has converted 27 existing stores to digital format, increasing the total number of digital conversions to 33. According to the results the newest ‘digital stores’ have outperformed the rest of the company’s estate. Even products have benefitted from the tech-savvy millennials. Argos witnessed growth in electrical products rise, while there were small declines in furniture, home wares and jewellery.
Home Retail Group’s Homebase is also getting in on the act. The retailer’s multi-channel sales grew 10% during FY15 to account for 8% of total sales.
However, Julie Palmer, Partner at Begbies Traynor believes that the company has a long way to go to fulfil its strategy plans:
“With wavering growth at Argos and continued sales and margin declines at Homebase, it seems Home Retail Group's restructuring plans and multi-channel retail ambitions are taking longer than expected to bed in”.
Nonetheless, John Coombe Chairman of Home Retail Group was satisfied with this year’s outcome and aims to push next year’s results higher.
“The Group has completed another year of good financial performance, delivering both like for-like sales and profit growth, together with a strong year-end cash balance of over £300m - We are recommending an increase of 15% to the full-year dividend.”