Sainsbury’s fast tracks its click & collect order for Argos

After a year of speculation, the Home Retail Group (Argos to you and me) saw the wrangling for its ownership finally take a clearer direction on Friday, when J Sainsbury Plc tabled a £1.1bn offer for the UK-based general merchandise retailer.

Argos has had an interesting corporate history and, should the takeover by J Sainsbury complete, it will be its 5th change of ownership in its 40 odd year history. Argos was born out of the Green Shield Stamps concept back in 1973, when the Green Shield Stamps founder Richard Tompkins decided that perhaps the time had come for people to be able to purchase goods for cash as oppose to via the stamp system. Since that time the company has found itself owned by BAT Industries in the late 70’s, gone through a listing on the London Stock Exchange (LSE) in the early 90’s, delisted via GUS’s acquisition of the company in the late 90’s and then demerged from GUS and re-listed in 2006 on the LSE.

What I find the most interesting about this potential deal is the rationale behind Sainsbury’s move for Home Retail Group. David Tyler, chairman of Sainsbury's is quoted as saying: "We will create a multi-product, multi-channel proposition with fast delivery networks that we believe will be very attractive to the customers of both businesses."

When you think of the other big supermarkets which have moved in to “multi-product” retailing, so Tesco, which went from food retail to multi-products and John Lewis / Waitrose which went from multi-products in to food, the similarities between both companies being that they did this via organic growth as oppose to via the acquisition route as per Sainsbury’s, it would appear that Sainsbury’s really is intending to use the Argos acquisition as a  “Fast track” to growth.