Sainsbury's agrees to sell Argos for £120m

Sainsbury's has agreed to sell Argos for £120m as the supermarket chain aims to focus on its core food business.

The buyer, Swift Partners, is a company which has been created to buy the brand and includes former Co-operative Group boss Richard Pennycook.

Sainsbury's said it would be "business as usual" for customers, staff, and suppliers. Shoppers will see no change as Argos will still operate in Sainsbury's shops, sell Habitat products, and offer Nectar points.

The deal is expected to be completed in February next year.

Swift Partners' Pennycook said he believed "strongly in Argos's future and see real opportunities to invest and build on its progress".

Argos operates in 667 shops across the UK, both standalone and in Sainsbury's shops, and has more than 1,100 collection points.

The deal comes a decade after Sainsbury's bought Argos – as well as Homebase, Habitat, and all the other retail brands owned by Home Retail Group – for £1.3bn.

Retail analyst Clive Black said he had always questioned whether Argos was "wholly aligned" with Sainsbury's grocery business, describing the supermarket group's attempt to sell Argos as "challenging and prolonged".

He said Argos has been a "suboptimal performer from a financial perspective".

In Sainsbury's latest results for the first three months of this year, group-wide sales were up 3.1%, although sales for Argos specifically had dipped 0.5%.

Bally Auluk, national officer at Usdaw, a union which represents Argos workers, said the announcement would create uncertainty, but that it welcomed Swift's commitment to "keeping the model of store in stores, standalone stores and local fulfilment centres".