London: Home Retail Group CEO Terry Duddy is starting a tele-vision shopping channel, adding book offerings and refurbishing 200 Argos catalogue stores in an effort to stem two years of profit declines.
The company will invest £150 million (Dh901 million) this fiscal year, an increase of £7 million, finance director Richard Ashton said on a conference call with journalists. Milton Keynes, England-based Home Retail's so- called benchmark pre-tax profit dropped 13 per cent to £254 million in the 12 months ended February 26.
Duddy is working to attract customers who have been discouraged from shopping by rising prices and the effects of UK government-budget cutbacks. Retail sales in the country fell by a record in March as accelerating inflation and concerns about employment prompted consumers to cut back, the British Retail Consortium said on April 12.
"Internet-only lines and TV sales should continue to expand choice, grow sales" and add "loyalty to the brand," Mike Dennis, a London-based analyst at MF Global with a "buy" recommendation on the stock, said.
The company is leasing Sky Channel 642 for a year and renting production facilities as part of a trial in the £750 million British television home shopping market. Argos, which sells appliances and toys online, is adding health care and beauty items for a web-only lineup of 12,500 products.
Its internet sales of books tied to third-party suppliers will rise to 5,000 titles this year from 750, and other product categories may be added to that feature, Duddy said.
Tesco said that domestic business had "lost a bit of momentum" in the fiscal second half through February and that it aims to broaden its product range to reverse the sales decline.
"Clearly this year is going to be difficult," Duddy said.
