GUS to test home delivery with Argos

GREAT UNIVERSAL Stores is to start a home delivery trial at Argos next month, just three months after acquiring the catalogue retailer in a hotly-contested pounds 1.9bn takeover bid.

The trial will take place in the north-west of England. It will allow customers to order by phone and pay pounds 2.95 for delivery to the home, or collect the order from the store for free.

Lord Wolfson, chairman of GUS, said there were no plans to introduce GUS's clothing ranges to the Argos catalogue. However, certain GUS catalogues, such as its Sports Direct brochure, might be made available to Argos customers. The company will start testing GUS's home furnishings offers at Argos in September.

The plans were revealed as GUS announced flat full-year profits of pounds 555m, hit by a profits collapse at Burberry. Profits from the luxury goods brand fell from pounds 62m to pounds 24.9m due to the effects of the Asian financial crisis and the strong pound.

Lord Wolfson said: "Burberry became over-reliant on Asia. We also didn't have the right design and merchandise staff. It has been very unhappy experience."

He said Burberry had stocked too many lines, with more than a million options compared to 72,000 in one of its catalogues. "In raincoats we had eight colours with a choice of eight different linings and in too many sizes." He added that the company had been forced to write off large quantities of stock as the colours were unfashionable. "Everybody knows Burberry but we have got to get the product up to expectations." He said that having the design centre in Hackney In London was a mistake as it was too far from the city's design centre in the West End.

GUS said reduced demand had forced Burberry to write down surplus stock by pounds 17m and close three UK manufacturing units in April and May, with the loss of 400 jobs.

GUS shares fell 43p to 807p as analysts cut their profit forecasts from pounds 585m to pounds 565m for the current year.