Disposal

GUS PLC
27 May 2003






                                                                     27 May 2003



                                    GUS plc
               Disposal of Home shopping and Reality businesses


GUS plc, the retail and business services group, today announces the disposal of
its Home shopping businesses in the UK, Ireland and Sweden, together with
Reality, its logistics and customer care business in the UK.


The businesses will be sold for about £590m to March U.K. Limited, a company
ultimately controlled by Sir David Barclay and Sir Frederick Barclay. The
disposal is unconditional in the United Kingdom. GUS will receive about £450m in
cash on completion of the transactions and an additional, unconditional sum of
about £140m payable in May 2006. The proceeds will be used to pay down debt.


Argos Retail Group (ARG) has also entered into various commercial contracts with
the buyer to cover the provision of home delivery and other services. These
contracts last for up to three years.



John Peace, Chief Executive of GUS, commented:


'Since 2000, we have been streamlining GUS to focus on fewer businesses which
operate in growth markets. The sale of our Home shopping and Reality operations
is a natural evolution of this process and marks a further step in the
transformation of the Group. It further demonstrates our commitment to focus on
our chosen growth businesses.


I would like to thank each and every person in our Home shopping and Reality
businesses for their tremendous efforts, particularly in the last few difficult
years when agency mail order has been in decline.'



Terry Duddy, Chief Executive of ARG, said:


'We believe that this transaction will better serve the long-term interests of
the customers and employees of our Home shopping and Reality operations and we
wish them well in the future. In the UK and Ireland, Argos Retail Group will now
focus solely on general merchandise through its Argos and Homebase businesses.'

Further details on transaction

GUS has entered into an agreement with March U.K. Limited to sell various home
shopping and related businesses. These include the agency and direct operations
and brands of Home Shopping UK and Ireland, Halens, the Swedish home shopping
business, Reality and the Additions brand and business. ARG will now comprise
Argos, Homebase, Wehkamp, its market-leading home shopping company in the
Netherlands, and ARG Financial Services.


The disposal of the UK Home shopping business and Reality is unconditional. The
disposal of the Irish and Swedish businesses is conditional on regulatory
approval.


The initial consideration for the UK businesses is approximately £410m, payable
today. The balance, receivable on completion following regulatory clearance in
Ireland and Sweden, is £40m. Additionally, there is an unconditional
consideration of about £140m payable three years from now. This is in the form
of a convertible loan note from the purchaser, with interest payable at LIBOR
plus 50 basis points.


Service agreements

ARG has also entered into various commercial agreements with the buyer for the
continuing provision of home delivery and certain other services. These are up
to three year, arms-length agreements based on current rates. In addition, ARG
will provide to the buyer some central functions, such as finance and IT, for
transitional periods of mostly up to twelve months.


The Argos Additions catalogue will be marketed through the Argos stores until
January 2004. After that, the buyer will have the right to use the Additions
brand but will not be able to use the Argos brand or distribute its catalogues
via the Argos stores.


Financial impact

The businesses being sold generated sales of £1.67bn and operating profit of
£35m in the year to 31 March 2003. The latter includes about £17m in ARG
Financial Services and about £5m in Halens. The transaction has no material
impact on earnings per share before amortisation of goodwill and exceptional 
items.


The businesses will be sold free of debt. The net book value of assets at the
date of completion is approximately £800m. GUS therefore expects to incur a book
loss of about £210m on the transaction and a provision for this amount is being
taken in the year to March 2003.


In addition, there will be an exceptional charge, which will be taken in the
year to March 2004, relating to the costs of the transaction and to the costs of
the resulting reorganisation of the ARG shared services infrastructure. This is
currently estimated at about £30m and will be mainly cash.


Enquiries

GUS
John Peace        Group Chief Executive                     020 7495 0070
Terry Duddy       Chief Executive,
                  Argos Retail Group
David Tyler       Finance Director
Fay Dodds         Director of Investor Relations

Finsbury
Rupert Younger                                              020 7251 3801
Rollo Head


GUS announcements are available on its website www.gusplc.com.


GUS will announce its preliminary results on 28 May 2003.


Certain statements made in this announcement are forward looking statements.
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from any expected future results in forward looking statements.









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