Crispin Odey, the founder of his eponymous $12.8bn London based hedge-fund firm, has hedged a notable bet against Home Retail group, citing that the “working-class brand” won‘t be able to thrive in the new, digital era
Odey has taken a short position over 1.9% of the Argos and Homebase parent company, equivalent to 15.4m shares. His fund took the position at the start of this month, just after Argos went on a discounting furore in the run up to Black Friday. The retailer‘s website crashed following unprecedented demand, forcing it to apologise profusely after a backlash of customer complaints.
“They are having a hard and torrid time of it,” Odey told The Sunday Telegraph. “I think they will have a bad Christmas. They are really being destroyed by the internet, which is allowing people to shop outside that area.”
“I don‘t think their move to online is working,” added the city tycoon.
Two-thirds of households shop at Argos at least once a year, but Argos has been moving away from catalogues and competing with Amazon instead by launching same-day deliveries.
Home Retail issued a stark profit warning in October and has been closing down B&Q stores left, right and centre. There has been recent speculation about private-equity interest in Homebase but sources say that any bidder would be “foolish” to approach at this point.
“It remains to be seen if they can find a bidder who is interested enough and pays a good price,” Odey said.
Odey said he was waiting to see if trading improved just before Christmas, and will then take a view on the company.