Despite improvement at the flagship Argos business, parent Home Retail’s shares fell after its full-year results.

Despite improvement at the flagship Argos business, parent Home Retail’s shares fell after its full-year results.

That was partly a reflection of the difficulties facing Argos stablemate Homebase, which could potentially slide into loss in the new financial year.

However, the improvement at Argos, which had been the target of bearish brokers for some time, is good news and gives grounds for optimism that the business can successfully be remodeled by managing director John Walden to become a “digital leader”.

Nobody, least of all Walden, would argue that Argos is in the clear just yet but it has a vision of the bright sunlit uplands and looks as if it is making progress.

Multichannel sales rose to account for 51% of the total. Stores are still involved in 90% of all sales. While that may change in time, the fact that 30% of Argos transactions are made in cash - a figure that has been broadly similar for several years - indicates that an extensive portfolio can still make sense, even though some observers question the scale of the Argos network.

While the stock slipped last week, there is another share price story to be told about Home Retail. Since mid-March the percentage of the retailer’s stock ‘on loan’ to short-sellers has almost halved from about 25% to around 13%.

The decline in shorting of the shares backs up the view of Home Retail’s chiefs that the business can adapt and thrive in a multichannel future despite the travails of the downturn.

Deal lets New Look focus on retail

New Look boss Alistair McGeorge and finance director Alastair Miller’s deal to refinance the business should put it in a better position to focus its energies on retail rather than its debt pile.

Although unlikely in the short term, an IPO of New Look may ultimately be on the cards again - assuming that it keeps up the retail pace.