GUS to axe 800 jobs

Shoppers have turned to discount stores on the High Street

The UK's largest catalogue retailer is to axe 800 jobs following a 15% drop in its profits.

Great Universal Stores ( GUS) is known to consumers by its Argos and Kays catalogue brands.

Pre-tax profit fell to £448m in the year ending 31 March, compared with £514m the previous year.

Profits from UK home shopping dropped to £21m from £106.3m, as discount retailers became more popular.

The cost of distribution and restructuring its business also hit costs, it said.

The job cuts are expected to take place over the next two or three years.

GUS now plans to combine its Argos catalogue business and home shopping chain.

The company tried to deliver an upbeat message.

"While conditions in the home shopping market have been very testing, our other businesses have performed well," chief executive John Peace said. "Following restructuring, the group is much better positioned to deliver growth."

Last year, the company was the second worst performer in the benchmark FTSE-100 index, losing 45% of its value.