New development opportunities

In February 2007, Home Retail Group signed heads of terms to develop the Argos retail format in India through a franchise arrangement with a joint venture company owned by leading Indian retailers Shopper’s Stop Ltd and Hypercity Retail India Private Ltd. Under the terms of the arrangement, Argos is providing its brand, catalogue and multi-channel expertise and IT support. The business, trading under the ‘HyperCITY-Argos’ brand name, is based largely on the existing Argos multi-channel proposition.

During the eight months since signing, the team involved has put together the first catalogue, containing 4,700 lines, in readiness for release this month. There will be an initial six stores open in the Mumbai region, testing a range of store formats. There will also be a non-transactional website, www.hypercityargos.com, available shortly, and the first stages of the home delivery and call centre operations are in place.

In April 2007, Home Retail Group acquired a 33% stake in an Irish out-of-town homewares business, ‘home store + more’. The investment of £6.8m (Euro 10m) is being used to fund an agreed plan to expand the chain in Ireland, at a rate of approximately three stores a year over the next few years. The business is trading in line with management expectations and it opened a third Irish store in July.

Separate from this investment, Home Retail Group is developing its own homewares format in the UK. The first UK ‘HomeStore&More’ store opened this month in Aylesbury, Buckinghamshire. Home Retail Group expects the initial pilot phase to include at least one additional store to be opened during the second half of the financial year.