Should Argos crash worry eBay?
Home Retail Group, owners of Argos, have seen their shares crash in value by almost a third in the past fortnight. If the wheels are coming off the group that could be a big concern for eBay who have closely allied themselves with Argos for eBay’s next generation of delivery services.
The shaky reaction by investors came when Argos issued a profit warning citing Christmas 2015 “seems less predictable than usual” with uncertainty around Black Friday, an increased level of investment and a challenging first half of the year.
It’s worth remembering that Argos are in the middle of a multiyear transformation plan including Fast Track Collection and Fast Track Delivery, digital concessions and growing Internet and mobile sales.
Tony Shiret, an analyst at Haitong Securities touched a nerve when he compared Argos to Comet, MFI and Woolworths, all of who disappeared from the UK’s high streets.
Tony pointed out that in the last downturn when Argos shares crashed to a low of 69.85, Argos had EBIT (Earnings Before Interest and Tax) of around 8.5% compared with today’s 2½-3%.
John Walden, Argos CEO, called the comparison to the failed high street retailers as ridiculous pointing out that the new digital Argos stores were outperforming traditional sites and so more would be converted.
Argos are doing many great things, their digital offerings, speed of service for collections and new delivery services are all fantastic for consumers. Reportedly the high street is winning against Amazon in entertainment retail sales, with Argos’ share rising by a percentage point to a 4.2% market share.
I’d hate to see Argos disappear from the UK retail landscape and it would likely be devastating for eBay’s fulfilment plans. Is it a good strategy for eBay to exclusively partner with just one retailer? From the other side of the coin, perhaps the Argos strategy to partner with eBay for their next generation fulfilment service is part of their turnaround plan to extract full value from their recent investments?
Could Argos go pop? Possibly, but probably unlikely, Argos’s share price has been twice as high as it’s current value, but it’s also been almost half the current value in the not too distant past. Tony Shiret raised the question, let’s hope the answer is an resounding “No”.
There is another point. My late father always said Buy Low and Sell High. Thus if you analyse Argos and decide that the current Share Price is unreasonably Low then now maybe the time to buy Argos Shares. I will be having a look at them but before anybody says that I am recommending that you buy them I am not. I am just advising that now maybe the time to look at them. If you think that the Stock Exchange has got it wrong then maybe buy some. If however you decide that the Stock Exchange has got it right then don’t buy them.
its only the UK that this effects most of ebay have never heard of argos , they wont worry ,they will just use someone else in they need to
Yes, they should be worried. Anyone holding shares in UKs tradtional retailers should be scared.
Even non tradational retailers like ASOS for example, today they are trading at 73.85 P/E which is stupidly expensive.
The market place is seriously skewed at the moment againt tradional retailers.
All you need to do is goto ebay and search for baseball cap, and see the mountains of counterfiet goods on offer for example. When you can get access to alternative products so cheaply and easily, why would you bother shopping at argos or any place that stocks genuine products. Hence the death of many retailers already.
I was at the mercedes dealer this week waiting for parts. A man came in and said his batteries in his key fob keep running out every 3 or 4 months. Hes tried Duracell and Verta. The dealer said he could buy a pair for £9.75 genuine mercedes and customers had reported they lasted alot longer.
He promptly walked out.
As i waited, i realised this is not a duracell vs verta v mercedes branded debate.
But the fact the man is simply purchasing very cheap fake batteries. If people think they can get a genuine battery for 1.25 inc delivery online. Why pay £3.99 at argos. The man clearly didnt see he was purchasing real v fake batteries or the difference between changing it every 4 months v 3 years.
Everyones a tight wad buying cheap trash from china, which is over speced in the description or counterfiet. But its okay because its cheap and i can jusy throw it away.
Just no one will admit it.
This is why UK retailers are struggling.
Buyers are not totally stupid !
we bet that most of argos stock originated in China, so why buy from argos when you can buy Direct from the same place Cheaper,
and why buy from a UK seller who imports and adds profit and tax when you can get the same thing Direct from china cheaper
Hello i was at mercedes for a gearbox service kit.
I would rather buy it from mercedes, than ‘dave the rave’ thanks.
But ill let you carry on buying part worn tyres and so forth because they are cheap, many also orgininated from China, so they must be the same. This is the most stupid thought process i have ever come across. However its very common and you have supported my point perfectly buy not realising the quality of goods varies greatly, even if the origin is the same and having a very narrow view on the world of commerce.
who mentioned tyres,?
were talking goods from the same place, just because argos imports them does not make them better, though it often makes them more expensive
You cant even get you head around varying quality of goods leaving a country.
Let alone a factory.
This is why UK retailers are struggling, because of this narrow minded igorant yet very common view point from UK citizens.
Pretty sad really.
‘Why buy from a UK seller who adds profit’
Exactly the problem my man. UK businesses need that added profit to survive and the more that comes factory direct, the less there is for our economy.
Sorry, but the majority of the common watch batteries that are BRANDED are VERY VERY inexpensive.
CR2032 or DL 2016 etc whether maxel or Duracel or Varta or Sony.
When I used to sell them on ebay I could buy for around £0.30 each.
If a retailer has a big enough requirement, they can get their own name put on them.
It’s the same with jewellery cleaning liquids. Some brands like Hagerty and Town Talk can be quite expensive. A large battery wholesaler gets Hagerty to make them and brand box them and sells under their own label for less.
Same chemicals but half the price.
I can’t speak for any other products but batteries I was buying for around 20 years and jewellery cleaner the same amount of time.
Ok so 30p each
You can get 2 delivered for 1.19 here.
So either, im stupid or somethings wrong somewhere. Surely there is price difference between duracell and a lesser brand. So unsure if 30p is top end entry pricing or lower end.
picking fault with the detail does not alter the point of the message
Why doesnt it ?
1. supply and demand (loads of my family buy via ebay cheap from China despite my advice not to, sometimes I am left with egg on my face as many deals have been unbelievable – I mean £1.99 free shipping from China unbelievable)
2. we are in a buyers market – buyer is king due to choice and convenience
3. we are in a technological evolution – hence the big boys who have the investment in technology and have the technological infrastructures in place are setting the pace
4. huge competition – the world has got smaller and everything it within fingertips
These are the reasons retailers and the retail industry is struggling.
Flip that sideways and It is also the reason why the marketplaces have been able to grow same as technology companies and logistics.
I tell you straight as always, the buyer mentality is the same, its about adapting and personal service. Problem is, this is very hard to do, hence retail is relentless.
embrace and enjoy.
and talking of Mercedes
they have it right,
, we run 3 mercedes, and genuine Mercedes parts are cheap in comparison to most other makers parts , so its not so cost effective or worthwhile for the Chinese to fake them
How do you know, are you the president of the Mercedes non fake society in China ?
of course I dont know , its just an Opinion based on experience
as yours is
mmm Clearly you not because youd cleary have a clue otherwise
Mercedes fakes have been common place for many years.
There are many many stories and it’s a global market, In the UK there are many chavvies wanting for save £10 on a £100 part. But driving a premium brand car. Personally id rather get a focus and use real parts. But people want to impress people they dont know and dont really car about and probably wouldnt like. So they buy 3 mercedes. Even if they have to fit them with the cheapest, lowest quality, fakiest parts available.
I think many are fitted to your 3 mercedes, due to your very narrow minded view on the world.
well if they are fake there good ones because our Mercedes main dealer stocks them and uses them and our mercedes are vans like most other business we buy them because their reliable and cost effective
according to you, they are all the same and i quote
‘buy from a UK seller who imports and adds profit and tax when you can get the same thing Direct from china cheaper’
and it was you that said.
‘Mercedes parts are cheap in comparison to most other makers parts , so its not so cost effective or worthwhile for the Chinese to fake them’
So i was confused.
oooooooooo Handbags on tamebay
somebody put the cheap popcorn maker from babz on :)
Also ifellow drives a micra
Get your facts right.
I drive a LandWind X7. Beacuse its the same as another brand one, just it costs more in the UK.
Or so they say…
But really im saving up for a ‘Geely Ge’
You need to get a job or a hobby you’ve posted way too much on here today, also all your posts have given me the *giggles*
nice how you pick a specific, high profile, one-off you know to be different, and ignore all the evidence pointing the other direction.
why didnt you pick the CityRover as your example?
exact same car as the Tata Indica, with a Rover Badge, but sets you back an extra £8,000 just ‘cos.
– pretty much exactly what you were talking about, but may disprove your nonsense slightly.
I just got a 2500 quid imac.
Its just like pc..
Just much better.
Maybe in 10 years I can put it on ebay and sell it to someone like you.
Both the tata and rover are crap.
No one cares what badge they have or dont have apart from you, cause your tight.
Those cars are aimed at tight customers like yourself that know facts like. They are the same with a different badge 99.9 per cent of world doesnt care, because they are crap. Like your beko.
I used to shop a lot at Argos. Then they converted my local store in Manchester to a digital store. It’s awful. First they had iPads to select your stock and several of them were not working days after the store reopened. Then they switched to Samsung tabs and last time I went in almost half of them weren’t working.
The quick pay machine was broken and kept rejecting my card, the staff were clueless, and the whole thing was just a horrible shopping experience.
The last time I shopped there I queued for 45 minutes (had to queue because I had a voucher) there was only person actually serving on a Sunday afternoon. Another member of staff couldn’t do anything without asking for help and another just walked off and disappeared. When I complained (and I wasn’t the only one) all I got was a half hearted apology and was told the manager was upstairs interviewing so they’d have more staff soon.
TL:DR – if Argos keep up this digital store expansion, they’ll go bust IMO.
I’m howling at the “Argos = High Quality, eBay = Cheap Fake” debate going on here.
for several categories, Argos have the buying power to specify a lower-quality, Argos-only version of mainstream items (already available cheaper on ebay, for the higher quality version).
we often run the grade-A version as normal, sometimes cheaper than Argos does the grade-B, and once Argos have had their run, we buy the Argos version remnants in cheap, and sell that one on even cheaper still.
– this is across many many categories, Argos specific items are costed down from the originals, not made better.
– Kinda stymies your “idiots buying cheap false-economy items on ebay when they should buy high quality at argos” argument.
also from previous experience, i know of loads of brands who produce the EXACT SAME item, put it in three different boxes, and charge three times as much for the one in the nice box.
customers are getting savvy a lot of the time, if you can get the same item, cheaper, then you do.
not to say there isnt a lot of false-economy items out there these days. a lot of the time i think even the so called High Quality items, are still relatively short lived, compared to the same product made just a few years ago.
Do you have any cheap marked down miele washing machines?
Or any that are the same internally without the logo?
Just im getting savy due to your advice.
yes thats how it works; pick one specific item you know isnt what we’re talking about here, and that makes your ill-informed opinions now fact.
what i did used to sell, was a Smeg brand fridge freezer, for £1200, which was exactly the same as the proline sitting next to it for £149, with a large plastic shell wrapped round it.
– not similar, not just the same parts. it was literally a £149 F/F in a plastic case with a £1200 price tag.
be savvy, be an idiot, the choice is yours, i couldnt care less. i’ll laugh either way.
Don’t people buy smeg because of what they look like?
Dont most VWs, Audis, seats and skodas have the same engine?
Better to hpi a 30k audi then save 5 quid here and there in my book than get a cheaper car.
I mean not like your neighbours can see the inside of your house is it. Or the other parents when you drop your kids off at school.
Will match the 700 iphone, but I buy cheap batteries of ebay from china. Save £1
Okay, not to bother.
My mate ‘dave the rave’ said bekos have the Same parts like the plug , which are made in a the same factory. Just a different box and logo.
Result, just saved £500.
Two friends and I had the exact same dishwasher…. apart from all three had a different manufacturer label stuck to the front.
I suspect it’s purely a ruse by retailers to avoid price matching which means you can never buy your Currys dishwasher in Argos or vice versa…
Yeah all cheap in house brands
Convenient for the repair man though… one set of parts for three identical brands.
Does make me laugh when you see a dual branded repair van with Indesit on one side and Beko on the other :-D
Dont mean they are the same thou.
Spot on! Take the widely respected British brand name of “Kenwood”. Now, if you buy a Kenwood food mixer, it still made by Kenwood BUT, if you buy a Kenwood cooker, it’s marketed through an Italian maker and made mostly in China . . . sold almost exclusively by Curry’s . . . and almost certain not even still to be working one day after the warranty runs out!
. . . but Joe Public doesn’t know that, they think Kenwood is a great British company!
Id much rather an indesit over a beko.
With better spin speed, performance, energy rating, less noise and better life.
You cant compare a £150 washing machine to a £700 one.
You might be able to compare a £15 blender to a £20 one. But have you really saved?
Most people want screw every last penny out of a purchase. That doesnt make you savvy it just shows your tight.
Most people are tight, but would never call themselves that, they prefer the term savvy.
So argos should sell cheap junk to them whilst making those people think they are clever fpr buying whilst having done one over on those evil companies and won.
After they can drive home in hpi audis, cause they are so clever and rich and feel good they saved 5 quid on a blender.
More or less what lidel and aldi do.
You didnt buy frosties, you got farties 30p cheaper, you clever shopper you.
So argos could do
Sonny instead of sony
Wellhung instead of samsung
Freako instead of beko.
Frapple instead of apple
And so forth.
I wont go down with the ship
Technically you will if you work there and it goes bust.
OMG can someone get ifellow a job. I would at Argos but will most probably lose mine when it goes under.
@ifellow you are boring and just talking to yourself on here.
I bet your wife is playing away with your brother due to your boring and repetitive personality.
Yes Argos sells cheap products, yes beko and indesit are washing machines. Yes there is a difference in part quality and OEM is always better. YES WE HAVE ALL HAD A GO ON YOUR MISSES!
Can you please stop the going on and on and on and on and on……
need to pick up my popcorn machine from babz from argos to be fair……
@ Tom at argos.
Are you alright mate. What you smoking?
Did you buy it from the dark web?
Sorry ifellow mate, I been on the gear all night, and I broke loads of stock at the ware house which is going to ebay sellers at 10 per cent discount.
Now im getting paranoid thinking someones posting in my name.
Think it should be small Ebay sellers that worry more than Ebay themselves. Ebay have aligned themselves heavily with Argos, if Argos start making noises about lower than expected sales and profits am guessing that obliges Ebay to crank up the knob on Cassini for Argos positioning in best match.
Call me a cynic, but if I wanted my sales to increase and had a partner that was heavily dependant on me for its future distribution network (not to mention sales) maybe I’d be making the same kind of noises.
Good point. I recently noticed that the sponsored links section was flooded with Argos products.
My category -watches has been really saturated in recent years by Argos, China and third parties such as watch shop.com advertising on the site.
Just been sacked from argos
Have you considered taking that to the Employment Tribunal and quoting “ifellow” as a justified defence in your actions?
i wish everyone a happy bonfire night !!!!
Ok I can see the trend Ebay forgot it started life as an online car booter and then got ambitions. Retail sales online are being swamped by Chinese imports (what price EU rules) Ebay has cloned Amazon. Time to go independant