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Annual sales increase 3.8 percent at J Sainsbury's Tu Clothing

By Prachi Singh

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Management

In its annual results announcement, J Sainsbury said that general merchandise sales, including Argos, declined by 0.8 percent but outperformed a challenging market. This category, the company said, performed strongly in key areas such as audio, mobiles and video games. J Sainsbury added that offering high street style at supermarket prices has made Tu clothing very popular with its customers. Sales of Tu Clothing grew 3.8 percent and clothing now contributes close to 1 billion pounds (1.3 billion dollars) of annual sales to the group.

Commenting on the trading, Mike Coupe, Group Chief Executive of J Sainsbury plc, said in a press release: "I am pleased to announce an increase in underlying profits before tax to 589 million pounds, driven by delivery of Argos synergies, efficiency savings across the group and improving food margin trends. General merchandise and clothing are both performing ahead of the market and we are opening Argos stores in our supermarkets faster than we originally planned. We will also deliver 160 million pounds EBITDA synergies by March 2019, six months ahead of plan."

Tu Clothing contributes to J Sainsbury’s positive results

The company added that over eight million customers regularly buy the range, making us the sixth largest clothing retailer in the UK by volume and that the group is strongly positioned in womenswear and childrenswear, with opportunities for growth in menswear, which now accounts for 15 percent of clothing sales and is J Sainsbury’s fastest growing clothing category.

Sales of clothing online increased by 45 percent. The company further said that it is now making the Tu ranges easily accessible to Argos customers through the Argos website, available for home delivery or collection from over 1,000 Argos and Sainsbury's stores across the UK. In the 18 months since it acquired Argos, the company is focusing on integrating our two businesses and joint range planning has enabled J Sainsbury to rationalise the product offer and give customers better overall choice and value.

The company opened 191 Argos stores in Sainsbury's supermarkets and expects to open around 90 more in the next financial year, bringing the total to around 280, ahead of its original schedule to open 250 Argos stores by March 2019. Customers can pick up their Argos and Tu clothing from 192 collection points in J Sainsbury supermarkets.

Underlying group sales including VAT and fuel increased by 9.0 percent year-on-year, mainly as a result of the impact of consolidating a full year of Argos. Underlying retail sales including VAT and fuel increased by 8.8 percent. Including Argos in the base, retail sales including VAT but excluding fuel increased by 1.6 percent due to an improved like-for-like performance. Retail underlying operating profit decreased by 0.2 percent to 625 million pounds (860.5 million dollars). Retail underlying operating margin declined by 18 basis points year-on-year to 2.24 percent.

Picture:Facebook/Tu Clothing

J Sainsbury
Tu Clothing