Sainsbury's sells Argos in £120m cut-price deal; shares rise over 5%

Published Jul 31, 06:38 AM UTC

Sainsbury's has announced the sale of its struggling catalogue retailer Argos to Swift Partners, a new company led by On the Beach chairman Richard Pennycook and former Morrisons boss Trevor Strain, backed by private equity firm True Capital. The deal is valued at £120m, a fraction of the £1.4bn Sainsbury's paid for Argos in 2016. Sainsbury's will receive £70m upon completion in February, with an additional £50m over three years. The sale includes proceeds from an Argos warehouse and will reduce Sainsbury's net debt by £250m, though the supermarket expects a £350m one-off accounting hit. Sainsbury's CEO Simon Roberts stated the move allows the company to focus on its core food business. Argos generated £4.1bn in sales last year, compared to Sainsbury's £25.9bn. Sainsbury's shares rose over 5% following the announcement.