GUS sent reeling by first fall in sales at Argos for six years
Friday 15 April 2005
GUS underlined the calamitous state of the high street yesterday when the retail-to-financial conglomerate reported the first fall in underlying sales at its Argos chain for six years.
David Tyler, GUS's finance director, said like-for-like sales at Argos fell 1 per cent during the three months to 31 March. The group does not expect sales to pick up all year. "We are planning on the assumption that things won't get better for at least six to 12 months," Mr Tyler said.
The 592-strong chain of catalogue stores is regarded as a shopping bellwether because it sells such a wide variety of goods. It leaves clothing and food alone but stocks pretty much everything else.
GUS said consumer spending in the UK had "slowed sharply" since November. This, combined with soaring costs - particularly in business rates and energy bills - has spelt bad news for scores of the country's retailers, several of whom have been forced out of business.
Although GUS is mid-way through a strategic review that is expected to see it spin off its Experian financial services arm, Mr Tyler said the dip in its UK retail fortunes would not put pressure on the board to speed up its decision. "The review is something we're thinking about in the context of long-term shareholder value. We're not too influenced by the vagaries of the consumer cycle in the UK," he said.
Nevertheless, analysts trimmed their pre-tax profit forecasts for the year to March 2006, cutting 4 per cent off their numbers to about £1bn. Shares in the group fell 12p to 901.5p.
At Argos, the fall in sales came in spite of the group's attempt to boost demand by reinvesting gross margin gains in lower prices. In the six months to 31 March, underlying sales were flat, although the cost of shopping at Argos has fallen by 6 per cent in the past year. Demand for "big ticket items" - mainly furniture and white goods - has been particularly weak, the group said, while sales of consumer electronics have held up. The picture was better at Homebase, the home furnishings chain, where like-for-like sales rose 2 per cent during the second half.
Experian continued to power ahead, with a 18 per cent increase in sales at constant exchange rates - its third consecutive year of double-digit growth.
- 2 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 3 Russian officials ban yoga because it's too much like a religious cult
- 4 German ethics council calls for incest between siblings to be legalised by Government
- 5 Ginger Pride festival to take place next summer, organisers say 'time of bullying gingers is over'
Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
German ethics council calls for incest between siblings to be legalised by Government
People are American flagging their Facebook profile pictures in response to those rainbow flagging them
Ginger Pride festival to take place next summer, organisers say 'time of bullying gingers is over'
Historic meeting between Pope Francis and Russian Orthodox head 'getting closer'
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
iJobs Money & Business
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...
Negotiable: Recruitment Genius: This extremely successful and well-established...