Argos considers option to take space in Homebase

Argos is examining the potential to introduce concessions in Homebase stores.

DIY retailer Homebase was acquired by Argos parent GUS last year for£900 million. Homebase head of property Phil Monaghan said a number of opportunities exist following the change in ownership.

They include the possibility of Argos taking space in Homebase sheds.

'It's something we're looking at, but there are issues we need to consider,' said Monaghan.

An Argos concession would need about 930 sq m of space if the high street model was to be replicated, and usage restrictions would prevent the strategy in some stores.

Evolution analyst Nick Bubb said: 'It's an interesting thing to explore, but there can't be that many opportunities. They (Homebase) sold many of their really big stores.'

He added: 'You have to be careful to maintain the focus on Homebase as a DIY retailer.'

Beyond the possible synergies from which Homebase and Argos would benefit, big changes to overall strategy are unlikely. 'GUS said they effectively acquired the existing Homebase strategy when it took over the company last year,' Monaghan said.

That strategy includes the introduction of mezzanine floors to increase sales space and the opening of smaller, 2,320 sq m stores.

Monaghan said maintaining a large store opening programme in the medium to long term will be difficult as competition for space continues to grow.