Sainsbury’s has agreed to sell Argos to Swift Partners, a new company set up by former Co-op chief executive Richard Pennycook and former Morrisons finance director Trevor Strain, for cash proceeds of at least £120 million, the supermarket announced on Friday.
The price is a fraction of the £1.4 billion Sainsbury’s paid to acquire Argos’s parent, Home Retail Group, in 2016. The transaction is expected to complete in February 2027, subject to regulatory and other conditions, with full separation of the two businesses anticipated by February 2029.
Swift Partners is backed by True Capital, the retail sector investment and advisory firm co-founded by its executive chairman, Matt Truman. The four principal shareholders are Pennycook, Strain, Truman and True Capital. Pennycook will serve as executive chair of Argos, dedicating three days a week to the business, while Strain and Truman will sit on the Argos board.
Of the £120 million, Sainsbury’s expects to receive at least £70 million on completion, including proceeds from the sale of an Argos distribution centre, with deferred consideration of £50 million over the following three years. The company said these receipts are expected to be offset by separation costs.
The sale covers Argos’s standalone stores and its outlets inside Sainsbury’s supermarkets, together with a distribution centre in Daventry, sourcing offices in Shanghai and Hong Kong, Argos Care and Argos Pet Insurance.
Sainsbury’s will retain responsibility for the Argos defined benefit pension scheme, which reported a surplus of £143 million as at 28 February 2026. The company expects the transaction to result in a non-cash impairment of around £350 million and a reduction in lease adjusted net debt of about £250 million.
Simon Roberts, chief executive of Sainsbury’s, said: “Sainsbury’s has transformed Argos into a leading multichannel retailer with millions of customers and thousands of talented colleagues. As we have strengthened our core food business, we have carefully considered what it will take to create the strongest possible future for Argos.
“Swift brings retail leadership, operational expertise, technology capability and long-term investment, alongside a deep commitment and belief in the future potential for Argos customers and colleagues.”
Pennycook said: “What attracted us to Argos is the strength of the business, with a trusted brand, loyal customers and dedicated colleagues. We believe strongly in Argos’s future and see real opportunities to invest and build on its progress.”
The agreement follows the collapse in September of talks to sell Argos to JD.com, one of China’s largest retailers, which has since entered the UK market with its Joybuy platform. Sainsbury’s ended those discussions after JD.com sought revised terms the grocer said were not in shareholders’ interests.
Argos reported a £223 million pre-tax loss in newly filed accounts for the year to 1 March 2025, after cutting more than 2,000 jobs in a general merchandise market it described as subdued and highly competitive. Sainsbury’s said Argos contributed £9 million of underlying operating profit in its 2026 financial year.
The supermarket said the disposal will have a broadly neutral impact on underlying operating profit, with income from ongoing commercial agreements covering Nectar, Nectar360, Habitat and collection points expected to offset the lost Argos contribution. It continues to expect total underlying operating profit of between £975 million and £1,075 million and retail free cash flow of more than £500 million this financial year.
Argos serves 20 million active customers, with around 80 per cent of sales starting online, according to Sainsbury’s. Until completion, the company said, both businesses will operate as they do today, with no change for customers.
