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How Argos's revival has it leading the digital revolution - Telegraph argos ireland digital watches

How Argos's revival has it leading the digital revolution Monday Interview: Five weeks after becoming head of Home Retail Group, John Walden is focused on making its high street chain a digital force John Walden believes Argos can be an industry leader. His £300m five-year turnaround plan will see its laminated catalogues replaced by tablets   Photo: Philip Ide

9:00PM BST 04 May 2014

With its laminate catalogue and creaking high street stores, Argos is not an obvious candidate to lead the online revolution in UK retail. But last week the retailer and its parent company Home Retail Group posted a recovery in sales and pre-tax profits under John Walden, the new chief executive.

Walden is the personification of Argos’s attempt to transform itself from one of Britain’s quirkiest high street chains to a leading digital retailer.

The American grew up in the suburbs of Chicago in the Sixties and Seventies – a long way from the showrooms for Green Shield stamp gifts on the streets of Britain that eventually evolved into Argos stores.

Yet, the 54-year-old is the man tasked with shaping the future of Argos. He was initially appointed managing director of the retailer two years ago and then became chief executive of Home Retail, which also includes Homebase, the DIY chain, when he replaced Terry Duddy five weeks ago.

It is perhaps because of his background that Walden has been able to mercilessly identify the strengths and weaknesses of Argos and how it can power future sales. The main strength, ironically, has often been touted as a weakness – it’s high street stores.

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“Originally, Argos was the department store in communities that didn’t have department stores,” Walden says. “So in a very small space you could get a department store, without having to drive to the city to get it. That is how it originally became successful.

“It was easy. You pop in, you collect your product and you leave. You didn’t have to invest a lot of time and energy. I think that continues to be the difference today. I think Argos is a unique model in the world from my experience.”

According to Walden, Argos is not just still relevant, but can lead the industry.

However, this belief relies heavily on the success of his £300m five-year turnaround plan.

That plan involves revamping Argos stores into so-called “digital concept stores” where the laminate catalogue is replaced by tablets, fast-track queues are introduced for customers to collect online orders, and the interior is modernised and stripped back so it looks more like an Apple store.

Argos has opened six of the stores so far, including one on Old Street in London, and plans another 20 this year.

One female shopper told Walden that she walked back out of one of the new shops to check whether it really was Argos.

However, Argos still faces an enormous task to shift the perceptions of most British shoppers. It has 734 stores in the country – most in need of a lick of paint – and needs to introduce more upmarket products and brands to attract affluent shoppers.

“It is one of the things we are trying to do with the transformation,” Walden explains. “Among some customers, Argos has been viewed historically as an downmarket, old-fashioned or outdated brand.

“It takes a lot more than a few digital concept stores to change a brand. But we feel like we have the right concepts. We have the right range of customers coming in.

"We think if we can implement the changes we are trying to in store, online, with the range and with fulfilment, we think we have got an opportunity to change how people think about Argos. It seems to be happening already to some degree.”

Even if Argos does succeed in modernising the brand, it is up against ferocious competitors. Not only are the supermarkets, Dixons and John Lewis battling against it, but so is Amazon, which appears willing to invest billions of dollars in new warehouses, technology, and cutting prices without making a profit in the near-term.

Walden believes Argos can compete with Amazon by using its stores.

“Customers will decide on a given day as to how they want to purchase the product and where they want to receive the product,” Walden says.

“Price is one of those factors and some days they will say they are willing to pay a little bit more and other days they will say 'I don’t care how convenient it is, I just want to buy something cheap’. We think there are enough [shopping] missions everyday where our model offers the best value in total for the customers.”

The sales data for Argos appears to back this up. Click-and-collect orders already account for a third of the business and almost one in five purchases are made on a mobile device. The only shopping websites that receive more visitors in the UK than Argos are Amazon and eBay.

Walden admits he knew nothing about Argos when a headhunting firm first called him in the US and asked whether he fancied running the retailer, but he insists he respects the brand’s heritage.

There are no plans for widespread store closures and the catalogue will remain, although potentially in a slimmed down form.

“I did quite a bit of research. I came over and spent some time in stores,” Walden says. “It is different to anything in the US. My first reaction was to try to understand it, because I wasn’t familiar with it. But the more I learned about it, the more I thought there was opportunity.

“There is a lot of history and a lot of anecdotes – people who grew up circling items at Christmas in the Argos catalogue.

We have to be respectful of that. We don’t think we will lose the catalogue. When more than 50pc of the population has a catalogue sitting in their home or office at any point in time, that is a really powerful marketing vehicle.”

The early success of Walden’s plan meant he was always the favourite to become Home Retail boss when the long-serving Duddy announced he was stepping down last year.

Walden was confirmed as chief executive in January – after what he insists was a broad search – and has now been in the job five weeks. So, as well as still running Argos, Walden must now get up to speed on Homebase.

He also plans to undertake a task that could have profound implications for Home Retail Group – conducting a review of why it is a group at all.

Argos generates more than 70pc of the company’s sales and profits, so what benefit is there of combining it with Homebase? And, with more than £300m of cash on the balance sheet, should Home Retail be looking to buy another retail brand?

“As a group we need to figure out what we stand for – why are we a group?” Walden says. “Is there anything in common with our businesses that we could better take advantage of.”

That it is a stark admission for a chief executive to make and one that could have ramifications, such as new acquisitions or even the sale of Homebase, although that is not on the agenda at present.

“Certainly, in the future, it is always possible to add other retailers. I think our challenge right now is to make sure the Argos transformation is successful. We are just two years into a five-year plan and we have more work to do there. We have got to pay attention to the brands we have got, and figure out the best way forward for those first.”

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omega watches seamaster 300m How Argos's revival has it leading the digital revolution Monday Interview: Five weeks after becoming head of Home Retail Group, John Walden is focused on making its high street chain a digital force John Walden believes Argos can be an industry leader. His £300m five-year turnaround plan will see its laminated catalogues replaced by tablets   Photo: Philip Ide

9:00PM BST 04 May 2014

With its laminate catalogue and creaking high street stores, Argos is not an obvious candidate to lead the online revolution in UK retail. But last week the retailer and its parent company Home Retail Group posted a recovery in sales and pre-tax profits under John Walden, the new chief executive.

Walden is the personification of Argos’s attempt to transform itself from one of Britain’s quirkiest high street chains to a leading digital retailer.

The American grew up in the suburbs of Chicago in the Sixties and Seventies – a long way from the showrooms for Green Shield stamp gifts on the streets of Britain that eventually evolved into Argos stores.

Yet, the 54-year-old is the man tasked with shaping the future of Argos. He was initially appointed managing director of the retailer two years ago and then became chief executive of Home Retail, which also includes Homebase, the DIY chain, when he replaced Terry Duddy five weeks ago.

It is perhaps because of his background that Walden has been able to mercilessly identify the strengths and weaknesses of Argos and how it can power future sales. The main strength, ironically, has often been touted as a weakness – it’s high street stores.

Related Articles

Argos to open stores in Homebase

30 Apr 2014

HRG profits rise as turnaround bears fruit

30 Apr 2014

Home Retail raises profit forecast

13 Mar 2014

Sales of wellies and waterproof mascara jump

14 Feb 2014

Argos, Homebase want rebate from suppliers

04 Feb 2014

“Originally, Argos was the department store in communities that didn’t have department stores,” Walden says. “So in a very small space you could get a department store, without having to drive to the city to get it. That is how it originally became successful.

“It was easy. You pop in, you collect your product and you leave. You didn’t have to invest a lot of time and energy. I think that continues to be the difference today. I think Argos is a unique model in the world from my experience.”

According to Walden, Argos is not just still relevant, but can lead the industry.

However, this belief relies heavily on the success of his £300m five-year turnaround plan.

That plan involves revamping Argos stores into so-called “digital concept stores” where the laminate catalogue is replaced by tablets, fast-track queues are introduced for customers to collect online orders, and the interior is modernised and stripped back so it looks more like an Apple store.

Argos has opened six of the stores so far, including one on Old Street in London, and plans another 20 this year.

One female shopper told Walden that she walked back out of one of the new shops to check whether it really was Argos.

However, Argos still faces an enormous task to shift the perceptions of most British shoppers. It has 734 stores in the country – most in need of a lick of paint – and needs to introduce more upmarket products and brands to attract affluent shoppers.

“It is one of the things we are trying to do with the transformation,” Walden explains. “Among some customers, Argos has been viewed historically as an downmarket, old-fashioned or outdated brand.

“It takes a lot more than a few digital concept stores to change a brand. But we feel like we have the right concepts. We have the right range of customers coming in.

"We think if we can implement the changes we are trying to in store, online, with the range and with fulfilment, we think we have got an opportunity to change how people think about Argos. It seems to be happening already to some degree.”

Even if Argos does succeed in modernising the brand, it is up against ferocious competitors. Not only are the supermarkets, Dixons and John Lewis battling against it, but so is Amazon, which appears willing to invest billions of dollars in new warehouses, technology, and cutting prices without making a profit in the near-term.

Walden believes Argos can compete with Amazon by using its stores.

“Customers will decide on a given day as to how they want to purchase the product and where they want to receive the product,” Walden says.

“Price is one of those factors and some days they will say they are willing to pay a little bit more and other days they will say 'I don’t care how convenient it is, I just want to buy something cheap’. We think there are enough [shopping] missions everyday where our model offers the best value in total for the customers.”

The sales data for Argos appears to back this up. Click-and-collect orders already account for a third of the business and almost one in five purchases are made on a mobile device. The only shopping websites that receive more visitors in the UK than Argos are Amazon and eBay.

Walden admits he knew nothing about Argos when a headhunting firm first called him in the US and asked whether he fancied running the retailer, but he insists he respects the brand’s heritage.

There are no plans for widespread store closures and the catalogue will remain, although potentially in a slimmed down form.

“I did quite a bit of research. I came over and spent some time in stores,” Walden says. “It is different to anything in the US. My first reaction was to try to understand it, because I wasn’t familiar with it. But the more I learned about it, the more I thought there was opportunity.

“There is a lot of history and a lot of anecdotes – people who grew up circling items at Christmas in the Argos catalogue.

We have to be respectful of that. We don’t think we will lose the catalogue. When more than 50pc of the population has a catalogue sitting in their home or office at any point in time, that is a really powerful marketing vehicle.”

The early success of Walden’s plan meant he was always the favourite to become Home Retail boss when the long-serving Duddy announced he was stepping down last year.

Walden was confirmed as chief executive in January – after what he insists was a broad search – and has now been in the job five weeks. So, as well as still running Argos, Walden must now get up to speed on Homebase.

He also plans to undertake a task that could have profound implications for Home Retail Group – conducting a review of why it is a group at all.

Argos generates more than 70pc of the company’s sales and profits, so what benefit is there of combining it with Homebase? And, with more than £300m of cash on the balance sheet, should Home Retail be looking to buy another retail brand?

“As a group we need to figure out what we stand for – why are we a group?” Walden says. “Is there anything in common with our businesses that we could better take advantage of.”

That it is a stark admission for a chief executive to make and one that could have ramifications, such as new acquisitions or even the sale of Homebase, although that is not on the agenda at present.

“Certainly, in the future, it is always possible to add other retailers. I think our challenge right now is to make sure the Argos transformation is successful. We are just two years into a five-year plan and we have more work to do there. We have got to pay attention to the brands we have got, and figure out the best way forward for those first.”

Retail and Consumer

Finance » Home Retail Group » Graham Ruddick »

In Finance»

In Retail and Consumer

Richard Buxton: 'Why I've bought Tesco shares'   Virgin customers told: we're moving you to TalkTalk and you'll lose your email

Top finance galleries»

The biggest companies in the world in 2015  

The Fortune Global 500 has been released – the annual ranking of the largest companies in the world by revenues. Here is a list of the 20 biggest corporate money-makers

The Big Short hits UK cinemas: these are the best films about business  

The Big Short, the film adaptation of Michael Lewis' book of the same name about the causes of the financial crisis, opens in UK cinemas this weekend. How will the story stack up against the greatest films about business?

These are the most valuable start-ups in the world  

In pics: Some fledgling firms have reached valuations in the tens of billions. These are the 20 priciest of them all

Starbucks' secret menu - the drinks you didn't know you can ask for  

There are over 87,000 different drink combinations at Starbucks, according to the coffee retailer’s website. How many of them do you know? From flu remedies to Harry Potter-inspired beverages, we highlight the weird and the wonderful brews and infusions.

Revealed: the weirdest sub-genres on Netflix  

From 'scary cult movies from the 1980s' to 'coming-of-age animal tales', Netflix has every niche covered.

Revealed: The 20 best countries in the world to do business  

Forbes's annual index assess countries by a range of factors from taxes and technology to red tape and innovation. These are the top 20 countries for doing business

What are the super-rich planning for Valentine's Day?  

From a rare pair of Gucci shoes, to spending £110,000 releasing an album, Britain's wealthiest are pulling out all the stops

First rate rise in 'August 2019' - latest market prediction  

Briefing: Predictions saw a huge shift this week. We explain why - and what it means for mortgages and savings

The world's 10 most expensive cities 2015  

New data: Discover the priciest cities around the globe for luxury property.

Comments Tables: The cheapest places to buy an Isa  

Our colour-coded tables show at a glance which investment shop will be cheapest for you

Comments Advertisement Advertisement

Latest finance videos »

Financial detox: saving money at work Financial detox: tips for saving on shopping BP boss: oil won't hit $100 a barrel for long time Sponsored Five ways Brexit could impact your investments

More from the web

Loading Advertisement Advertisement

More from the web

More from The Telegraph

News   The latest news, opinion and analysis View Football   Catch up on all the latest football news and results View Film   All the latest film trailers, reviews and features View Competitions   Enter one of our exciting new competitions View

Back to top

HOME Finance Financial Crisis Debt Crisis Live Markets Banks and Finance City Diary Economics Transport Media and Telecoms Energy Retail News Personal Finance Your Business Investing Savings Student Finance Jobs Job Search Companies China business Money Deals Money Transfers Comment Alex Find an IFA Contact us Privacy and Cookies Advertising Fantasy Football Tickets Announcements Reader Prints Follow Us Apps Epaper Expat Promotions Subscriber Syndication

© Copyright of Telegraph Media Group Limited 2017

Terms and Conditions

Today's News

Archive

Style Book

Weather Forecast