Home Retail’s troubling full-year figures and the appointment of strategy consultants OC&C by new Argos boss John Walden has put the spotlight on the future of the general merchandiser’s store portfolio.

Home Retail’s troubling full-year figures and the appointment of strategy consultants OC&C by new Argos boss John Walden has put the spotlight on the future of the general merchandiser’s store portfolio.

The news of OC&C’s root-and-branch review has triggered speculation of further casualties on the UK’s high streets – boarded-up stores and the jobs cuts that follow are too tempting an angle for the mass media. The stories have added fuel to increasingly vociferous calls from the City for Home Retail to shrink its 748-store Argos footprint, as it struggles to compete with online rivals. “Argos will need a significant store closure programme,” said one retail analyst on Wednesday.

But Home Retail chief executive Terry Duddy, despite unveiling a 60% decline in full-year pre-tax profits to £102m, has continued to stand firm, denying that he plans widespread closures. Axing stores may grab headlines, but, as Duddy argues, it is a blunt tool to apply to the complex and wide-ranging issues that face this retail giant.

Central to any turnaround plan will be how the company leverages its portfolio to seize opportunities in click-and-collect, how it responds to consumer demands for a more engaging in-store experience and how it builds momentum in the race for multichannel success.

Argos is among those retailers whose product ranges are exposed to the worst of the economic winds. That only muddies the water when it comes to identifying the extent to which the retailer’s woes are of its own making and where shorter-term macro-conditions are to blame. 

What critics, Duddy, Walden and his hired guns must answer is not what will please the City in the short term, but whether a greatly reduced store portfolio would leave Home Retail better placed to leverage the economic recovery as and when it comes.