Warm weather and stores revamp give Homebase a boost
Wednesday 23 October 2013
Homebase has managed to lift first-half sales for the first time in four years thanks to the warm summer and spending millions of pounds revamping its stores.
The revival marks an impressive turnaround for Terry Duddy, the departing chief executive of parent company Home Retail Group, who is stepping down next year, with sister business Argos recording a fifth-successive quarter of growth.
However, the revamped Homebase stores dented Home Retail’s profits, with interim, pre-tax profits falling 70% from £46.7 million to just £14.2 million on sales up 2.6% from £2.5 billion to £2.6 billion.
Around 15 stores will have £1 million refits, although about 10 will close and dozens more could shut in the next few years.
Duddy said: “We’ve got about 75 stores with lease renewals coming up in the next three to five years and we will be looking closely at whether we keep them or not.”
Like-for-like sales at Homebase for the six months to the end of August were up 5.9% compared with the same period last year.
At Argos, the company is gearing up for the all-important Christmas period, with tablets set to dominate wish lists. Argos is hoping to cash in on the tablet demand by releasing its own £99 device.
Like-for-like sales at Argos rose 2.3% over the period and five new “digital concept” stores will open in the next few weeks which will see the company’s famous catalogue disappear to be replaced by instore tablets instead.
Meanwhile, Sports Direct saw gross profits soar 19.4% to £199.8 million in the nine weeks to the end of September, with sales up 15.1% to £463.7 million.
The company said it was pleased to beat tough comparisons against last year’s Olympics.
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