Sainsbury's has sold Argos to Swift Partners to focus resources and investments on its core food business. The transaction, announced at the end of July and expected to close in February 2027, will generate at least £120 million in cash for the British group and create a simpler corporate structure with higher margins and greater cash flow generation.
Swift Partners is a new company formed specifically for the acquisition by Richard Pennycook, Trevor Strain, and Matt Truman, along with True Capital, a firm specializing in retail investments and advisory services. The new owners intend to support Argos' development through investments in technology, digital innovation, and artificial intelligence, enhancing its brand, multichannel model, and store network.
Sainsbury's will receive at least £70 million upon completion of the transaction, which will also include proceeds from the sale of the Argos distribution center in Daventry, with a further £50 million to be paid over the following three years. However, the proceeds will be offset by the costs of separating the two businesses, a process expected to be completed by February 2029.
The transaction is also expected to reduce the group's net debt by approximately £250 million, including leases, primarily through the transfer of liabilities related to the Argos properties. Sainsbury's will instead record a non-cash impairment charge of approximately £350 million and will continue to be responsible for the chain's defined benefit pension fund, which had a surplus of £143 million as of February 28, 2026.
The disposal will have a substantially neutral impact on underlying operating profit and is expected to result in a single-digit percentage increase in underlying earnings per share. The loss of Argos' operating contribution, amounting to £9 million in the 2026 financial year, will be offset by revenue generated from commercial agreements with Swift and the reduction in interest on leases.
The two companies will maintain a long-term partnership covering Argos stores and collection points within Sainsbury's supermarkets, as well as the Nectar and Nectar360 programs and the Habitat brand. These agreements will ensure continuity for customers, employees and suppliers even during the separation phase.
Swift will acquire the freestanding Argos stores and store-in-store operations in Sainsbury's supermarkets, along with the sales channels, brands, logistics network, and Argos Care and Argos Pet Insurance services. The deal will also include the procurement offices in Shanghai and Hong Kong, while the leases for the property portfolio will be assumed by the new owner.
Argos will therefore continue to operate through its website, home deliveries, stores, and collection points, with no immediate changes for consumers. Richard Pennycook will become executive chairman, while Trevor Strain and Matt Truman will join the board and work alongside the current management team.
According to CEO Simon Roberts, Sainsbury's has transformed Argos from a traditional catalogue retailer into one of Britain's leading multichannel operators. A shareholder focused entirely on non-food retail will now be able to accelerate its transformation and strengthen its position in a market characterized by increasing competition.
For Sainsbury's, the sale represents a further step in its strategy to refocus on food, following the sale of its banking operations, ATM network, and Argos Financial Services card portfolio. The group confirmed its 2027 financial year forecast of underlying operating profit between £975 million and £1,075 billion and retail free cash flow of more than £500 million.
