Sainsbury’s sells Argos to Swift Partners retail specialists

Supermarket Sainsbury’s has agreed to sell its Argos business to a firm set up by retail veterans including former Co-operative Group boss Richard Pennycook in a deal worth at least £120 million.The grocery chain said Swift Partners will buy 201 Argos standalone stores, as well as its 466 stores within Sainsbury’s shops based on a long-term agreement and a further 466 collection points, logistics network, pet insurance and product warranty cover.Swift will also buy Sainsbury’s distribution centre in Daventry and Sainsbury’s sourcing offices located in Shanghai and Hong Kong as part of the deal.Sainsbury’s said the move to offload Argos will allow it to focus on its core food and grocery operations.Swift is a new firm set up by retail experts including Mr Pennycook, former Morrisons chief operating officer Trevor Strain, and backed by Matt Truman and his retail investment and advisory firm, True Capital.Sainsbury’s will get cash proceeds of at least £120 million from the sale, with a £70 million up front payment when the deal completes, which is expected in February next year, with a full separation of thew Argos business by 2029.Sainsbury’s did not disclose how many staff will be transferring over to Swift Partners under the deal.Simon Roberts, chief executive of Sainsbury’s, said: “As we have strengthened our core food business, we have carefully considered what it will take to create the strongest possible future for Argos.“Swift brings retail leadership, operational expertise, technology capability and long-term investment, alongside a deep commitment and belief in the future potential for Argos customers and colleagues.“Richard, Trevor and Matt understand and value the Argos brand, share our values and will accelerate Argos’s transformation through their dedicated expertise and long-term investment.”Read MoreHe added it was “business as usual” for Argos workers and customers following the agreed sale.Mr Pennycook will act as executive chairman of Argos following the acquisition, dedicating three days a week to the business, while Mr Strain and Mr Truman will serve on the Argos board.Mr Pennycook said: “We believe strongly in Argos’s future and see real opportunities to invest and build on its progress.“We see clear potential to strengthen Argos’s customer proposition, digital capabilities and nationwide reach.”The sale comes after it emerged in September last year that Sainsbury’s had held talks over a sale of Argos with Chinese e-commerce giant JD.com, though the discussions swiftly collapsed.The supermarket bought Argos for £1.4 billion in 2016, when it had some 845 standalone stores.But many of the standalone stores have since been shut and sales at the chain have flagged in recent years, with Sainsbury’s leading a revamp of the firm.Bally Auluk, national officer at retail trade union Usdaw, said: “We recognise this announcement will create uncertainty for those affected, and we will provide support, advice and representation throughout the process.“Swift has a good track record of engagement with Usdaw and we welcome the commitment to keeping the model of store in stores, standalone stores and Local Fulfilment Centres and that any changes will be handled fairly, transparently and in consultation with employees and their union representatives.“Our focus will be on protecting our members’ jobs, terms and conditions and minimising disruption wherever possible.”