Home Retail GroupTrading

GUS PLC
14 September 2006

14 September 2006

                                    GUS plc

                        Home Retail Group Trading Update

Home Retail Group (formerly Argos Retail Group), the UK's leading home and
general merchandise retailer which is part of GUS plc, this morning issues an
update on trading to coincide with the publication of its prospectus later
today.

Terry Duddy, Chief Executive Officer of Home Retail Group, said:

'Home Retail Group has made good progress against varied conditions in our
product markets. While remaining cautious on the outlook for the UK consumer in
the near-term, we look forward to continued success as a separately listed
company.'

% change in sales year-on-year
--------------------------------------------------------------------------
Five months to 31 August 2006                             %                 
Argos       - total                                      13               
            - like-for-like                               5       
                
                                                         
Six months to 31 August 2006*                                         
Homebase    - total                                       1                
            - like-for-like                              (3)        
 --------------------------------------------------------------------------
* Homebase's year-end is the end of February to avoid distortions relating to
the timing of Easter

For the early part of the financial year, the non-food, non-clothing market in
the UK was stronger than expected. However, with continued weakness in certain
product markets, Home Retail Group remains cautious on the outlook for a
sustainable recovery in the rate of growth of consumer spending in the
near-term.

Argos
Argos again outperformed its market in the period, with total sales up 13% of
which new stores contributed nearly 8%. At 31 August 2006, Argos traded from 670
stores, with a net 13 new stores opened in the period.

Like-for-like sales increased by 5%, boosted by an outstanding performance in
the first three months of the period. In the lead up to and during the course of
the World Cup, sales of flat panel TV packages and set top boxes grew
particularly strongly. Video game systems and bedroom furniture continued to
perform well throughout the period. There was also strong growth in child safety
and other nursery-related lines, and in seasonal products boosted by the warmer
weather in July.

The overall strong sales performance in the period was, however, substantially
offset by a related reduction in gross margin particularly in the first three
months of the year. This was driven by the shift in the product mix and by the
popularity of Argos' promotional offers, partially countered by the benefits
obtained from supply chain initiatives.

Argos Direct, the delivery to home operation, grew by 13% in the period and
accounted for 25% of Argos' sales. Within this, Internet orders for delivery to
home rose by 46%, representing 8% of total sales. An additional 10% of sales
were reserved by phone or the Internet for later collection in store (the
service known as Check and Reserve), which was 61% ahead of the same period last
year. The Autumn/Winter catalogue was launched on 29 July with about 17,000
lines available to customers across all stores and channels.

Homebase
Sales at Homebase increased in the six months to 31 August 2006 by 1% in total,
of which 4% came from new stores. Homebase opened a net seven stores in the
period bringing the total to 304, of which 156 had a mezzanine floor.

Like-for-like sales declined by 3%. Sales of furniture and kitchens continued to
show strong growth throughout the period, while core DIY and decorating ranges
remained weak. The improvement in sales in the later months of the period was
largely driven by warmer weather encouraging purchases of seasonal categories,
particularly air conditioning and horticulture. As planned, gross margin was
ahead of the previous year due to a reduced level of promotional activity in the
earlier months of the period, together with the benefits obtained from supply
chain initiatives.

Financial Services
Home Retail Group Financial Services is trading in line with expectations.
However, its response to the recommendations of the recent OFT enquiry in
respect of late payment fees is expected to impact current year reported profit
from early in the second half by about £3-4m. The impact is expected to
annualise in the following financial year.

As announced last month, a joint venture with Barclays Bank PLC will develop an
Argos credit card proposition and new personal loan products for Argos and
Homebase. Home Retail Group's existing Argos and Homebase store card operations
are not impacted by this arrangement.

Future announcements

Home Retail Group will announce its Interim Results on 21 November 2006.

Enquiries

Home Retail Group
Richard Ashton                 Finance Director                   020 7495 0070
Stuart Ford                    Head of Investor Relations


Finsbury

Rupert Younger                                                    020 7251 3801
Rollo Head


This announcement is available on the Home Retail Group website,
www.homeretailgroup.com, and the GUS website, www.gusplc.com.


All financial information in this Trading Update is based upon unaudited
management accounts. Certain statements made 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 events or results to differ
materially from any expected future events or results referred to in these
forward-looking statements.




                      This information is provided by RNS
            The company news service from the London Stock Exchange