Argos enjoys electricals sales growth as overall profits increase

Retailer also says its digital stores have produced 'encouraging' results
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Argos parent Home Retail Group has posted a rise in profits for the year ending February 28th.

Sales increased by one per cent to £5,710m, Argos' like-for-like sales rose 0.6 per cent and overall profit before tax rose by 32 per cent to £93.8 million.

As part of Argos' transformation plan from a catalogue-focused to digital-led business, the retailer now has 60 digital-focused stores, as well as 20 concessions in Homebase stores, and online sales are now making up 46 per cent of Argos' overall sales. 

Argos said that electrical products continued to deliver sales growth, driven by strong growth in VGS, TVs and mobiles, partially offset by market-driven declines in sales of tablets.

The retailer also converted a further 27 existing stores to a digital format over the past year, taking the total number of digital conversions to 33. 

Seven new small format stores were opened, including a store within the Cannon Street tube station, which is designed to allow commuters to reserve their products during the day for same-day collection on their way home. 

During FY2016, a further 80 digital concessions within Homebase are planned, together with the recently announced addition of 10 digital concessions within Sainsbury's stores. Plus, Argos expects to convert at least another 50 existing stores to digital formats. 

"The digital stores have produced encouraging results," said Argos in a statement. "Sales at the later iterations of digital conversion stores outperformed the rest of the store estate, having incorporated early insights from the first trial stores such as the effectiveness of the new in-store tablet based browsers, and the impact of product displays, catalogues and paper-based promotions.

"The Argos digital concessions in Homebase stores have also performed well and based on their trading performance so far, are expected to deliver good returns on their relatively low investment cost. The small format digital stores have also shown good early performance."

John Walden, chief executive of Home Retail Group, added: "The Group performed well in FY15 and ahead of consensus profit expectations, achieving 14 per cent growth in benchmark profit before tax and 25 per cent growth in benchmark EPS.

"Both Argos and Homebase contributed positive like-for-like sales and profit growth for the second successive year. I believe the strategic plans we are pursuing across the Group will enable us to innovate and lead in a rapidly changing retail market."

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