Additions, catalogue store group Argos's clothing book and Web offer, is not performing as well as had been hoped, analysts believe.
Following a company visit, broker CSFB fears that 'the prospects of creating a materially profitable business are small', and estimates losses to be between£10 million and£15 million a year.
CSFB said Additions product is sourced from the ARG Equation division, which targets older people through catalogues such as Kays.
The broker notes: 'Additions has been locking itself into a product proposition aimed primarily at older customers.'
Additions is targeted at women aged between 25 and 35 and was launched in January last year.
Sales had reached£130 million by March 31 this year.
Retail Knowledge Bank director Robert Clark said: 'I think GUS will persist with it. A number of established fashion retailers have already been surprised at its ability to sell fashion via e-commerce.'
No one at Argos was available for comment.