Argos chain to get digital overhaul

Argos
Retailer Argos is to get a digital overhaul that will see its catalogue take a back seat and at least 75 stores closed or relocated over the next five years.

Parent company Home Retail Group said it would reduce the circulation of the traditional Argos catalogue - launched in 1973 - as it refocuses the chain as a digital-led retailer.
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It also plans to trim its 739-strong store estate and move shops into shorter leases to be able to relocate as part of a plan to use stores as product pick-up points for online orders.

Home Retail said: "Stores and catalogues will remain important, but their roles will be adapted in order to support a digital offer." It stressed that having a "strong local presence" remained important.
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The news comes after a six-month review of the Argos chain to revive the business.

In half-year results, Home Retail said underlying earnings at Argos were 3% down at £3.3 million with a return to like-for-like sales growth, up 0.6% in the six months to September 1.

Argos boss John Walden, who was appointed earlier this year to revitalise the chain, said it was unlikely the catalogue would be axed altogether, but admitted it may decline "precipitously" as sales shift online. He said it would be "foolish" to pull it now, with around 85% of customers having seen the catalogue before they buy.

He added that the group would keep stores "at the centre of what we do".

Argos will launch its first digital catalogue before Christmas and begin trials in January to determine the future format and numbers of the traditional catalogue. The group has reduced the number of catalogues it prints by around 18% over the past two years to between 16 and 17 million copies twice a year, which are collected by customers in store.

Home Retail said it wants to broaden the Argos customer base and would focus on fewer and "more powerful" brands, such as children's toy range Chad Valley and Habitat - the homewares chain it bought last year. Terry Duddy, chief executive of Home Retail, said it was an "ambitious but achievable" overhaul for Argos, which has suffered poor trading as it has lost out to online rivals in recent years.

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Argos chain to get digital overhaul

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

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