Sainsbury's has agreed to sell Argos for £120m as the supermarket chain aims to focus on its main food business.

Sainsbury's said it would be "business as usual" for Argos customers, staff, and suppliers.

Shoppers will see no change as Argos will still operate in Sainsbury's shops, sell Habitat products, and offer Nectar points.

The buyer, Swift Partners, is a company that has been created to buy the brand and includes former Co-operative Group boss Richard Pennycook.

Sainsbury's Morecambe has an Argos store within the shop.

placeholder image — Sainsbury's Morecambe has an Argos store within the shop.

There are 667 Argos shops across the UK, with 201 operating as standalone stores and 466 operating within Sainsbury's including the Morecambe and Lancaster store.

It also has more than 450 collection points.

Sainsbury's has been trying to sell Argos - which has been seen as an underperforming brand - for some time.

Sainsbury's bought Argos – together with Habitat and all the other retail brands owned by Home Retail Group – in 2016 for £1.4bn. It then sold Argos financial services, which runs the Argos card, for around £720m in 2024.

Sainsbury's Lancaster on Cable Street in the city.

In September last year, its talks to sell the rest of Argos to Chinese online retailer JD.com fell through.

Simon Roberts, Chief Executive of J Sainsbury plc, 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. Richard, Trevor and Matt understand and value the Argos brand, share our values and will accelerate Argos’s transformation through their dedicated expertise and long-term investment.

“I would like to thank Argos colleagues for all of their commitment and hard work. Today is an important next step in building the strongest future for Argos and I would like to reassure our colleagues, customers and suppliers that it’s business as usual.

“For Sainsbury’s, this is a further step forward in our strategy. Having rebuilt the core strengths of our food business, this agreement allows us to focus all our resources and investment on the significant opportunities ahead.”

Richard Pennycook, Swift Partners, 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.

“Argos's combination – of a strong digital business supported by standalone stores, stores inside Sainsbury’s and Local Fulfilment Centres - gives it a distinctive position in the market and an excellent platform for growth.

"We hold Argos senior management in high regard and plan to build on its strengths – bringing additional experience and skills to complement and augment the existing team. We see clear potential to strengthen Argos’s customer proposition, digital capabilities and nationwide reach.

“Trevor, Matt and I share a strong belief in Argos, its people and what it can achieve in the years ahead. We are all making a long-term commitment to the business and look forward to working closely with the team to deliver even more for customers, while maintaining Argos’s strong values.”

The deal is expected to be completed in February next year.