Bluechip: Argos tills ring an unhappy note
Sunday 25 January 1998
Either way, the stock market's verdict has been damning: from the high of 800p the shares touched just over a year ago, they have fallen sharply to 416p today. Problems first surfaced around Christmas 1996. The absence of the normal build-up in October and November led Argos to expect a quieter Christmas than usual, and it hired less staff for the rush. In the event, there were too few staff to serve customers when the Christmas frenzy, which was short but intense, did arrive.
Now it has had to issue its third profits warning in a year because of another disappointing Christmas. Sales of toys, electricals, jewellery, clocks and watches were down by 5 per cent. Total sales for the group fell by 1.5 per cent for the five weeks to 27 December.
Argos will cut 230 jobs, but that is unlikely to make much of an impression on the bottom line, especially when it has committed to recruiting a further 1,000 staff to support the opening of 31 new stores this year.
Its proven, no-frills formula will continue to work, but Argos is being squeezed. Woolworths is regaining the high ground and offering a serious challenge. Argos should maintain an edge over its rivals, but it seems that mail order is making some inroads into its customer base.
The company has trialled home shopping, and will roll it out nationally this year. Orders are phoned in and can be delivered to the customer's home or picked up 24 hours later from the branch.
The shares still trade at 14 times 1997's full-year figures, if you accept analysts' forecasts that the group can make pounds 125m pre-tax - a pounds 20m cut from the previous forecast level. It is too soon to say that there is any evidence of a recovery under way: avoid.
- 1 End of the licence fee: BBC to back radical overhaul of how it is funded
- 2 This restaurant has misunderstood the concept of 'cheese and biscuits'
- 3 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 PornHub turns masturbation into energy in bid to save the planet
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
End of the licence fee: BBC to back radical overhaul of how it is funded
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...