Sainsbury’s has agreed to sell Argos in a deal worth at least £120 million to newly formed group Swift Partners.
The sale will see Swift Partners, a retail investment group led by industry veterans including former Co-operative Group boss Richard Pennycook, take on 201 standalone Argos stores and the 466 Argos outlets located within Sainsbury’s supermarkets.
The deal also includes collection points, logistics operations, Sainsbury’s distribution centre in Daventry, and sourcing offices in Shanghai and Hong Kong.
Simon Roberts, chief executive of Sainsbury’s, said: “As we have strengthened our core food business, we have carefully considered what it will take to create the strongest possible future for Argos.
“Swift brings retail leadership, operational expertise, technology capability and long-term investment, alongside a deep commitment and belief in the future potential for Argos customers and colleagues.
“Richard, Trevor, and Matt understand and value the Argos brand, share our values and will accelerate Argos’s transformation through their dedicated expertise and long-term investment.”
The transaction marks Sainsbury’s next step in its strategy to focus more heavily on its grocery operations.
Swift Partners was set up by Mr Pennycook and former Morrisons chief operating officer Trevor Strain, and backed by Matt Truman and his retail investment and advisory firm, True Capital.
Under the agreement, Sainsbury’s will receive cash proceeds of at least £120 million, with a £70 million upfront payment when the deal completes—expected in February next year.
The full separation of the Argos business is targeted by 2029.
Sainsbury’s has not yet said how many employees will transfer to Swift Partners under the sale.
Usdaw, the retail trade union, has acknowledged concerns among staff but noted past positive engagement with Swift.
Bally Auluk, national officer at Usdaw, said: “We recognise this announcement will create uncertainty for those affected, and we will provide support, advice and representation throughout the process.
“Swift has a good track record of engagement with Usdaw and we welcome the commitment to keeping the model of store in stores, standalone stores and Local Fulfilment Centres and that any changes will be handled fairly, transparently and in consultation with employees and their union representatives.
“Our focus will be on protecting our members’ jobs, terms and conditions and minimising disruption wherever possible.”
Argos was acquired by Sainsbury’s in 2016 for £1.4 billion, at which time it operated around 845 standalone locations.
In the years since, many standalone stores have closed, and the brand has faced declining sales despite a Sainsbury’s-led overhaul.
It emerged in September last year that Sainsbury’s had engaged in talks to sell Argos to Chinese e-commerce firm JD.com, though those discussions ended without a deal.
Swift Partners has expressed confidence in Argos’ future under its new ownership.