Sainsbury’s has agreed to sell Argos to newly formed investment firm Swift Partners for at least £120 million, the supermarket announced on Friday, ending a decade-long ownership of the general merchandise retailer as it sharpens its focus on its core grocery business.

The transaction, which is expected to complete in February 2027, values Argos at a fraction of the £1.4 billion Sainsbury’s paid for Home Retail Group in 2016.

Sainsbury’s said the sale would create a simpler business with higher margins, stronger free cash flow and allow greater investment in its food operations, while Argos stores inside Sainsbury’s supermarkets, Nectar rewards and Habitat concessions will continue under long-term commercial agreements.

Simon Roberts, chief executive of Sainsbury’s, said: “As we have strengthened our core food business, we have carefully considered what it will take to create the strongest possible future for Argos.” He added that Swift Partners would bring “retail leadership, operational expertise, technology capability and long-term investment” to support the retailer’s next phase of development.

Swift Partners was established for the acquisition by former Co-operative Group chief executive Richard Pennycook, former Morrisons finance chief Trevor Strain and retail investor Matt Truman alongside True Capital. Pennycook, who will become executive chair of Argos, said: “We believe strongly in Argos’s future and see real opportunities to invest and build on its progress.”

According to Sainsbury’s, it expects to receive at least £70 million on completion, including proceeds from the sale of Argos’s Daventry distribution centre, followed by £50 million in deferred payments over three years. The supermarket will retain responsibility for the Argos defined benefit pension scheme and expects to record a non-cash impairment of around £350 million as a result of the transaction.

Retail union Usdaw said the sale would create uncertainty for Argos employees but welcomed commitments from Swift Partners to retain the retailer's existing operating model, including standalone stores, in-store concessions and local fulfilment centres. Bally Auluk, Usdaw national officer, said: "Our focus will be on protecting our members' jobs, terms and conditions and minimising disruption wherever possible," adding that the union would continue discussions with both Sainsbury's and Swift as the transaction progresses.

The deal follows several difficult years for Argos as demand for discretionary goods weakened and competition intensified from online retailers including Amazon and low-cost Chinese platforms such as Temu. Argos reported a pre-tax loss of £223.2 million in the year to March 2025, while Sainsbury’s latest figures showed Argos sales slipped 0.5 per cent in the first quarter of the current financial year.

The sale comes less than six months after Argos announced plans to launch an online marketplace as part of a wider multi-year transformation strategy. In February, the retailer said the platform would allow carefully selected third-party sellers to offer products through the Argos website and app, expanding customer choice while retaining its focus on curated ranges, product quality and trusted fulfilment. The marketplace, built with technology from Mirakl, was presented as a key pillar of Argos's long-term digital growth strategy.

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