More than 300 Argos stores could be shuttered if Sainsbury’s completes its acquisition of owner Home Retail Group, analysts claim.
That came during a dramatic afternoon when rival bidder Steinhoff sensationally withdrew its interest, preferring instead to up the ante in its pursuit of electricals retailer Darty.
Sainsbury’s offer has yet to be formally recommended to Home Retail shareholders by its board, but the grocer’s boss, Mike Coupe, admitted the deal was now “more likely” than it was before Friday’s events.
The grocer has already unveiled its plans for the Argos business and said it would integrate more Argos concessions into larger Sainsbury’s stores.
Coupe revealed that the average remaining lease length on Argos stores is “less than five years”, sparking speculation that many could be closed.
And according to The Times, Exane BNP Paribas analyst John Kershaw calculated that 330 of Argos’ 734 stores could be shuttered and replaced by concessions inside nearby Sainsbury’s stores.
He predicted that Sainsbury’s would add 270 new Argos shop-in-shops to its stores, as well as 770 click-and-collect points.
Speaking following Sainsbury’s offer on Friday, Coupe insisted that the potential deal would create more Argos jobs in the long term and refused to comment on exactly how many stores could be closed.
City analysts had previously predicted that between 150 and 200 Argos stores would be shuttered if the deal went ahead.