So used has the City become to dismal trading at Home Retail’s flagship Argos business that any sign of respite prompts jubilation.
On Tuesday, after Home Retail issued its first-quarter update, the retailer’s stock leaped on the news that like-for-like revenues at Argos were down only 0.2% versus expectations of a decline of about 4%.
The change was driven by a better showing from consumer electronics as shoppers splashed out on products such as tablets and laptops, and by the continued growth of multichannel.
Relief at Argos was offset by tough trading at Homebase, where sales slid 8.3% like-for-like as relentlessly wet weather resulted in soggy sales of seasonal goods.
Home Retail boss Terry Duddy was typically cautious about prospects but said he was “comfortable” with full-year market expectations. Argos has by no means returned to its days of soaraway success, but its better than expected recent performance should raise internal morale and reassure that its business model is not as outmoded as its critics fear.
Tesco does right thing in Japan
A handsome dowry has been paid to Aeon to take Tesco’s loss-making Japanese business off the UK grocer’s hands.
Tesco, which sold half the 117-store business to Aeon for a nominal sum, will inject £40m to enable restructuring as a joint venture partner and then exit.
The deal will enable Tesco to focus on the markets where returns are likely to be greatest, and to concentrate on improving performance in its core domestic market.
Tesco has also shown itself to be a good corporate citizen in how it has handled the disposal. The decision to leave Japan came in the aftermath of last year’s tsunami and nuclear disaster and Tesco has behaved with a sensitivity and responsibility towards its employees that can only serve its international reputation well.