Home Retail Group, the owner of the Argos and Homebase retail chains, is cutting the number of its stores as part of its plan to boost online sales.

The company said it was closing or relocating 75 Argos outlets and reducing its reliance on the Argos printed catalogue to generate sales. The move came after the group posted almost a 40 percent fall in first half pre-tax profits.

Terry Duddy, chief executive of Home Retail Group, said, “The plan will re-invent Argos as a digital retailing leader. The transformation plan is ambitious but achievable.”

The company is investing £100 million annually for the next three years into transforming the Argos business, in a move overseen by Argos' new managing director John Walden, who was previously at US retailers Best Buy and Sears.

Argos currently has 750 stores and some will now close as their leases expire. Walden said, “Our catalogue represents a big part of our business so it would be foolish for us to pull it. But the trend towards digital is pretty obvious. The catalogue will evolve, not disappear.”

Sales also fell at Homebase for the six months ending 1 September, with a 6.2 percent like-for-like dip.  

In June Argos said that its multi-channel sales, including online, represented 51 percent (£418 million) of its total sales, up five percent on the previous year.

In April Home Retail Group inked a four year deal with Atos to implement a business account scheme, in which small and medium sized businesses can purchase goods and services in-store, online and via Argos Direct.