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Analyst: Sainsbury's Has 'No Intent' In Building Irish Presence Through Home Retail Bid

Published on Jan 12 2016 7:33 AM

Analyst: Sainsbury's Has 'No Intent' In Building Irish Presence Through Home Retail Bid

A leading analyst has told Retail Intelligence that despite Sainsbury's launching a bid to takeover Home Retail Group, which incorporates Argos and Homebase, the retailer has currently no interest in developing a Republic of Ireland business.

At the weekend, reports suggested that Sainsbury's is lining up a second bid to acquire Home Retail Group, valued at £1.2 billion (€1.6 billion), having had an earlier, private bid rejected.

Should it be successful, it would see the UK grocer take over the 40 Argos stores and dozen Homebase stores in this country, facilitating its entry into the Irish market.

Commenting on the retailer's plans, Bruno Monteyne of Bernstein Research told RI that following a conversation with the retailer, "there is no ROI intent in this bid. Nothing at all. This is very much about Sainsbury's accelerating its pre-existing strategy, and not about entering a new country."

In a recent report on Sainsbury's bid for Home Retail, Monteyne added that the move came as a "complete surprise" and is "not the silver bullet Sainsbury's' investors were waiting for."

He added that for Argos, the deal "may provide a more successful clothing category to their business and potentially the homeware products of Sainsbury's. It will do little to change the structural trend towards online nonfood retailing, where Argos is at a competitive disadvantage to Amazon."

© 2016 - Checkout Magazine by Stephen Wynne-Jones

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