Home Retail's Argos suffers another sales fall

LONDON (Reuters) - Home Retail , Britain's biggest household goods retailer, said sales at its Argos business fell again in its second quarter, as weak demand for electricals such as TVs and tablets persisted.

Argos, which makes 70 percent of group turnover, saw sales at stores open over a year fall 2.8 percent in the 13 weeks to Aug. 29, better than a 3.9 percent first quarter decline but worse than an average analyst forecast fall of 1.8 percent.

Home Retail had already warned in April first half Argos sales would fall due to weak demand and falling prices in some categories as it works through revamps to the business. It said Thursday overall market conditions had been weak in August.

Second quarter underlying sales at Home Retail's Homebase DIY business rose 5.9 percent, the company said, against analyst expectations of a 4.1 percent rise. Gross margin improved by 125 basis points at Argos but fell by 75 basis points at Homebase.

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(Reporting by Neil Maidment; Editing by Li-mei Hoang)