Sainsbury’s has agreed to sell Argos for a minimum of £120 million, marking a significant step in the supermarket group’s strategy to refocus on its core food business. The deal, expected to complete in February, will transfer ownership of Argos—including its stores, collection points, pet insurance business, product warranty services, the Daventry distribution center, and sourcing offices in China—to Swift Partners, a newly formed company led by experienced retail executives.

Sainsbury’s acquired Argos in 2016 for approximately £1.4 billion, integrating the general merchandise chain’s operations into its supermarkets by replacing many standalone stores with in-store collection points. Despite that consolidation effort, Argos has struggled to achieve sustained growth, recording a pre-tax loss of £223.2 million for the year ending March 2025, after posting a profit the previous year. Meanwhile, Sainsbury’s food sales have steadily increased, rising 4.9 percent to £25.9 billion in the same period.

Simon Roberts, chief executive of J Sainsbury plc, said the sale followed a “careful consideration” of Argos’s future and described it as a “win-win” for both companies. He emphasized that it would allow Sainsbury’s to concentrate all resources and investment on its core food business. Roberts also reassured colleagues, customers, and suppliers that Argos would continue to operate normally during the transition.

Swift Partners is led by Richard Pennycook, former chair of the Co-operative Group, along with Trevor Strain, ex-operating chief of Morrisons, and Matt Truman, executive chair of investment firm True Capital. Pennycook highlighted the group’s commitment to strengthening Argos’s customer proposition, digital capabilities, and nationwide footprint. He pointed to the 466 Argos stores within Sainsbury’s supermarkets as a distinct advantage and expressed openness to exploring new standalone store openings, noting the brand’s ambition for growth.

Argos, founded in 1973 as a catalogue retailer and once boasting over 800 stores, has shifted most of its sales online following the closure of many physical outlets. The company discontinued its famous printed catalogue in 2020, a move that drew nostalgic responses from the public, though Pennycook did not rule out its possible return in the future.

The transaction values Argos at a fraction of the price Sainsbury’s originally paid a decade ago. Analysts have characterized the sale as the end of Sainsbury’s challenging chapter with the general merchandise chain, which has weighed on the group’s overall performance amid competition from dominant online retailers such as Amazon.

Sainsbury’s reported it expects a non-cash charge of approximately £350 million related to the disposal, while maintaining it will have a broadly neutral effect on the company’s underlying operating profit. Argos currently employs around 14,000 people, all set to transfer to Swift Partners upon completion of the deal. Sainsbury’s shares closed up 1 percent following the announcement.