Argos to reduce high street presence

The Argos business model has been under pressure for some time but has managed to maintain a reputation for value in tough trading conditions, despite the ever growing threat from the internet.

The Home Retail Group, who own Argos, have decided to slim down it's presence in the high street by planning the closure of 75 stores over the next 5 years, in an effort to compete with the low margin internet retailers such as Amazon.  

Profits for the 6 months to the end of August have dropped to £18 million, down by 37%. 

The overall strategy is to evolve into an online retailer but would you close a profitable shop? Probably not, so the intention is to review each outlet as the lease on that store comes up for renewal and decide whether to close it, or move it to a better location on a shorter lease. This will give the group greater agility if the stores they do decide to run with, come under even greater pressure from digital markets. 

The high street remains a tricky place to do business.