Strong sales growth at GUS confounds fears of slowdown

By Nigel Cope,City Editor
Thursday 23 January 2014 02:36
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GUS, the retail group, has reported strong sales at its Argos high street business, confounding fears of a slowdown. The company also dismissed any interest in the Littlewoods high street stores which may be sold on by the Barclay brothers, who have bought the retail group from the Moores family.

GUS pleased the City with better-than-expected growth at both Argos and its Experian financial information division.

A first-half trading statement showed that in the six months to 30 September Argos' like-for-like sales were up by 7 per cent on the same period last year. This has been an improving trend with 5 per cent growth in the first quarter, rising to 9 per cent in the second.

David Tyler, GUS's finance director, said the figures had been boosted by the launch of the autumn/winter catalogue in July, which included 2,500 new lines, a 28 per cent increase on last year. Prices have been cut by 3 per cent.

Argos remains on track to open a further 35 stores in the next six months on top of its existing chain of 500.

At Experian, total sales were up 6 per cent, with sales in the difficult US market up 4 per cent. This was driven by increased demand for credit information on individuals as companies seek to reduce bad debt risks. Demand for marketing information was lower.

GUS shares rose 34p to 572p with WestLB Panmure upgrading its stance to "outperform" from "neutral".

Elsewhere on the high street, Mothercare, the under-performing baby goods retailer, showed tentative signs of a recovery. In the 14 weeks to 12 October like-for-like sales were down 1.2 per cent on the previous year, compared with a fall of 3.1 per cent in the 14 weeks to 12 July.

The company said it had received no approaches regarding a possible takeover.

"Clothing continued to underperform through the summer but stocks were largely cleared through the sale," the company said. "The autumn clothing ranges were not helped by the warm autumn weather in September, but are now selling well."

Mothercare will report full- year results on 21 September. A new chief executive, Ben Gordon, joins from Disney Stores on 2 December. Mothercare shares rose 8.5p to 100.5p.

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