Argos chain to get digital overhaul

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.

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.

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.