Takeover target Home Retail reported a worse-then-expected 2.2 per cent drop in like-for-like sales at its biggest chain Argos, hours after its said it was in advanced talks to sell its Homebase chain for £340m.
Home Retail, which supermarket group Sainsbury's wants to buy, said Argos suffered a 13 per cent reduction in traditional walk-in sales during December and a 10 per cent increase in digital sales was not enough to compensate.
Analysts had expected like-for-like sales at Argos to rise by 0.3 per cent in the 18 weeks to 2 January.
Home Retail said its benchmark pre-tax profit for the financial year ending February would be around the bottom of the current range of market expectations of £92m to £118.m
Like-for-like sales at DIY chain Homebase rose five per cent. It said late on Wednesday it was close to selling Homebase to Australia's Wesfarmers.