The Home Retail Group's operating divisions comprise Argos, a multi-channel retailer of general merchandise, and Homebase, the UK's second largest home improvement retailer. The company came into existence in autumn 2006 after demerging from Great Universal Stores, which was wound up after being in business since 1900.

The organisation's recent strategy has been to continue concentrating on cost management and exploiting economies of scale across the combined group in order to maintain growth in a sector that is vulnerable to the impact of any wider economic slowdown. Areas of focus include IT, corporate procurement, media buying and property management.

Despite a slight but expected drop in total sales of 0.9 per cent during 2008, the company's Argos brand retained its number-two position among UK online retailers - second only to Amazon according to Hitwise - and saw online sales increase by up to 27 per cent in the 12 months to June 2009.

Fully-integrated multiple shopping channels, enabling buyers to reserve goods online before collecting them in their local Argos store or having them delivered, continue to grow. Some 40 per cent - £1.7bn worth - of Argos sales are now ordered and fulfilled using more than one channel, with internet orders representing 26 per cent of total sales - an increase of nearly a quarter over the previous year to £1.1bn.

Technology improvements to the website that have helped accelerate this growth include the addition of real-time stock availability of any of the retailer's 21,000 products in the two nearest stores, and a free text message that is sent to the buyer containing their reservation number; a second free message will follow on the day the reservation expires.

A customer rating and reviews systems was added to the Argos.co.uk site in October 2008, and 300,000 reviews were added in the first six months after going live. The company received the 2009 Online Retailer of the Year award at the Retail Week awards.

In a bid to reduce the number of products returned to its stores and cut repeat calls to customer service agents, in January 2009, Argos completed the rollout of a knowledge management system from eGain Communications. During a trial period, the system, which is aimed at swifter resolution of customer service queries through providing specialist assistance on electronic goods, was claimed to have help reduce repeat calls by 10 per cent, as well as reducing avoidable returns and service visits.

Argos' partner firm Homebase is now using the same technologies to increase its online sales. The number of transactional stock on homebase.co.uk rose to 5000 towards the end of last year, and visitors to the site could order 9000 Argos items for home delivery, or browse one of 11,000 other lines.

The DIY firm's ultimate aim is to have 100 per cent of its lines either browseable or transactional. Argos's online stock check facility has been added to all browseable lines, while its reserve-and-collect service is being trialled in 25 Homebase stores.

In terms of exploiting cost synergies, the two operating companies are moving towards sharing a common sourcing and logistics infrastructure to try and make delivery of products to customers more efficient. An increasingly joint product pool is also being created to cut purchasing and other operating costs.