The retailer, which acquired Homebase in 2002 from private equity firm Permira, has opened 10 of the DIY stores in the past year, but plans to speed up and add 45 stores in three years. The openings will boost Homebase's total selling space by about 12 per cent.
Argos Retail Group chief executive Terry Duddy said that integration benefits from joint sourcing on some ranges for Argos and Homebase will also increase, rising from£20 million at present to£40 million in the year to March 2006. The savings will be reinvested in lower prices or used to support future growth. Duddy said: 'We have a clear agenda for growth that will improve the overall [Homebase] business.'
Homebase is also testing a catalogue, Furniture Direct, in 15 stores. It pools products from the Argos and Homebase ranges and uses Argos Direct's infrastructure. Homebase will assess the success of the catalogue next year before deciding whether to introduce it across its 283-store chain. GUS chief executive John Peace believes the furniture sector is attractive because it is a growing but fragmented market.
Homebase revealed like-for-like sales up 4 per cent for the six months to September 30. Like-for-like sales at Argos were up 7 per cent. Total sales at Argos Retail Group were up 10 per cent to£2.7 billion, while profit increased by 13 per cent to£173 million. GUS announced profit before tax of£323 million, up from£247 million a year before.