GUS, the retail and financial information group which is planning to seek a stock market flotation of Burberry, its luxury goods brand, warned yesterday that current retail growth rates in the UK are unsustainable.
The Argos high street catalogue stores, which were acquired by GUS four years ago, were the star performer in a second-quarter trading update from GUS, with underlying sales in the six months to 31 March up by 13 per cent on the same period last year.
"The retail market cannot keep growing at these levels," said David Tyler, GUS' finance director. "This time last year the Chancellor was cutting taxes and interest rates were coming down. You will see a big slowdown in April and a continued slowdown thereafter. And that's fine. What we are saying is that Argos will continue to outperform the market."
Argos has broadened its product range and cut prices to drive sales. It has done particularly well in electricals, furniture and toys.
GUS said it planned to seek a partial listing for Burberry by June, subject to market conditions. Merrill Lynch and Morgan Stanley will handle the float, which is expected to value Burberry at £1.2bn-£1.8bn.
Burberry has shrugged off the worst effects of the 11 September disaster with a robust performance. Underlying sales were up by 5 per cent on last year. Trading in the United States has been "resilient", the company said, with new stores being opened in Beverley Hills and the SoHo area of New York.
Experian, GUS's credit information division, saw underlying sales in its key North American business drop by 2 per cent. Globally, underlying sales were up by 2 per cent.
A further 300 jobs will be cut at GUS's Reality division, which includes the former White Arrow delivery business.
GUS shares fell 15p to 674.5p.Reuse content