High street and digital retailer Argos has plunged into the red, reporting a substantial pre-tax loss of more than £200 million for its latest financial year alongside significant staff reductions.
Financial Performance and Job Cuts Detailed
Newly filed accounts reveal the scale of the challenge facing the chain. For the 12 months to 1 March 2025, Argos recorded a pre-tax loss of £223.2 million. This starkly contrasts with the previous year's performance, where it achieved a pre-tax profit of £37.3 million.
Revenue also fell during the period, dropping from £4.22 billion to £4.13 billion. In tandem with this financial decline, the company dramatically reduced its workforce. The headcount was slashed from approximately 12,000 employees to just 9,800, meaning over 2,200 jobs were cut.
Challenging Market Conditions and a Failed Sale
The retailer, owned by FTSE 100 supermarket giant Sainsbury's, attributed the weaker revenue to a "subdued and highly competitive general merchandise market." It also cited a significant drop in online traffic in the first half of the year and noted that a "cooler and wetter summer" left sales behind expectations.
There was a slight rebound in the final six months as online traffic improved, with the company returning to year-on-year growth in its fourth quarter. However, the underlying pre-tax loss, adjusted for one-off factors, still stood at £73 million, driven by lower margins on promotional sales.
This financial update follows a brief period of uncertainty over the brand's ownership. In September 2024, Sainsbury's confirmed it was in discussions with Chinese e-commerce powerhouse JD.com regarding a potential sale of Argos. Those talks were terminated just a day later, leaving Sainsbury's, which bought Argos for over £1 billion in 2016, as its continuing owner.
Strategic Focus for the Future
In a statement, the Argos board outlined its strategy to recover. The focus is now on "encouraging customers to shop with us more often and with bigger baskets." The company stated it is driving changes in its digital and commercial offerings and has made progress in strengthening the Argos proposition.
It also emphasised ongoing efforts to reduce operational complexity while maintaining what it calls "market-leading convenience" for its customers. As the UK's second-largest general merchandise retailer behind Tesco, Argos faces a critical period in adapting to a rapidly changing retail landscape.
