Sainsbury's Sells Argos Business to Swift Partners for £120 Million
The supermarket group has agreed to sell its general merchandise retailer to a new firm backed by retail experts, aiming to refocus on its core food business.
Supermarket group Sainsbury's has announced the sale of its Argos business to Swift Partners for £120 million. The deal includes a £70 million up-front payment, with the transaction expected to be completed by February 2027.
Swift Partners is a newly established firm led by retail veterans, including former Morrisons chief operating officer Trevor Strain. It is backed by Matt Truman's retail investment and advisory firm, True Capital.
The agreement will see Swift Partners acquire Argos's standalone stores and its concessions within Sainsbury's supermarkets. The sale also encompasses Argos's logistics network, pet insurance, and product warranty cover. Additionally, Swift will take ownership of Sainsbury's distribution center in Daventry and its sourcing offices in Shanghai and Hong Kong.
The full separation of the businesses is anticipated by February 2029. Sainsbury's stated that the sale will allow it to concentrate on its primary food business and support Argos's next phase of growth.
Argos, which operates standalone stores, in-store concessions, online, and through collection points, was purchased by Sainsbury's in 2016 for £1.1 billion. In recent times, analysts had noted Argos as a drag on Sainsbury's performance, particularly after a disappointing Christmas sales period. While Sainsbury's grocery sales saw a 5.4 percent increase in the third quarter, Argos sales declined by 1 percent overall and 2.2 percent during the critical Christmas trading period.
Argos has faced challenges from broader economic pressures, including inflation and cautious consumer spending, as well as intense competition from online retailers. Its performance was also impacted by Sainsbury's strategic focus on its food operations and the integration of Argos into supermarket formats, which reduced its high-street presence. Analysts had previously suggested that Argos was an unnecessary distraction for Sainsbury's as it competed with rivals like Tesco, Aldi, and Lidl.
Simon Roberts, chief executive of J Sainsbury plc, expressed confidence in Swift Partners, stating they bring "retail leadership, operational expertise, technology capability and long-term investment." He added that the new owners "understand and value the Argos brand, share our values and will accelerate Argos's transformation through their dedicated expertise and long-term investment."
Argos is the UK's second-largest general merchandise retailer and ranks as the third most-visited retail website in the country. Previously, Sainsbury's had engaged in discussions to sell Argos to JD Sports, but that deal did not materialize.