New development opportunities

Home Retail Group Plc
23 February 2007


23 February 2007





                             Home Retail Group plc

                  Investment in new development opportunities


Home Retail Group plc, the UK's leading home and general merchandise retailer,
today announces it is investing in two new development opportunities.


The company has today signed heads of terms to develop the Argos retail format
in India through a franchise arrangement with a joint venture company owned by
leading Indian retailers Shopper's Stop Ltd and Hypercity Retail India Private
Ltd.


The company also announces it has signed heads of terms to subscribe for a 33%
stake in Irish homewares retailer, 'Home Store + More', subject to clearance
from the relevant competition authorities.


Terry Duddy, Chief Executive Officer, commented:


'I am delighted to be able to announce today's strategic developments. The heads
of terms with Shopper's Stop and Hypercity, both pioneers in the Indian retail
market, gives Argos an initial foothold in what is a rapidly expanding market.
Meanwhile, our investment in Home Store + More will strengthen our position in
the highly fragmented homewares market through the roll-out of its format in
Ireland.


These two ventures provide an exciting but cost-effective opportunity to
leverage our skills, sourcing scale and capabilities over time. However, our
core focus continues to be driving the organic growth opportunities within Argos
and Homebase.'


Argos franchise development in India


Home Retail Group will franchise the Argos concept to the joint venture company
and under the terms of the arrangement, Argos will be providing its brand,
catalogue and multi-channel expertise and IT support. The business will be
launched towards the end of the year under the 'HyperCITY-Argos' brand name,
initially in the Mumbai region. At this stage, it is envisaged that the offer
will be based largely on the existing Argos multi-channel proposition.


Strategic investment in Home Store + More


Home Retail Group has signed heads of terms to subscribe for a 33% stake in the
Home Store + More business, subject to clearance from the relevant competition
authorities. Home Store + More is an out-of-town homewares retailer, currently
with two stores in the Dublin area.


Home Retail Group's investment of around £7m (Euro 10m) will be used to fund an
agreed plan to expand the out-of-town homewares chain in Ireland. Separate from
this investment, the management team of Home Store + More will also support Home
Retail Group in our own development of a homewares format in the UK in due
course.



Enquiries

Home Retail Group

Richard Ashton Finance Director 01908 600 291

Stuart Ford Head of Investor Relations

Kim Warren Investor Relations Executive


Finsbury

Rollo Head 020 7251 3801

Alice Macandrew


Notes to editors


About Shopper's Stop Ltd

Shopper's Stop is a leader in the Indian retail sector and a pioneer in setting
up a large format department store chain in India. With a presence in eleven
Indian cities, Shopper's Stop operates 22 department stores and has numerous
other retail formats. Shopper's Stop has a proven capability of working with
international partners, for example it operates a franchise agreement with
Mothercare plc that has so far seen the launch of 11 stores in India with plans
to open more than 40 in the next five years.


Shopper's Stop operates over one million square feet of retail space in India
with more than 200 international and Indian brands sold through their stores.
The company was established by K. Raheja Corp, one of the leading real estate
developers in India, with interests in commercial, residential, retail and
hospitality. Shopper's Stop was partially floated in India two years ago and K.
Raheja Corp retains a 67% stake.


About Hypercity Retail India Private Ltd

Hypercity Retail India Private Ltd is also backed by the K. Raheja Corp. The
first Hypercity store opened in May 2006 with over 120,000 square feet of
trading space in Mumbai. It stocks a large range of groceries, fresh foods, home
products, clothing and consumer durables and offers its customers convenience,
variety and value for money. Hypercity is progressing with plans for a roll out
of the format in India. Shopper's Stop worked with K. Raheja Corp to develop
this business and has an option to acquire 51% of the business in 2008.


About the Indian Franchisee Joint Venture Company

The joint venture company will be jointly owned by Shopper's Stop Ltd and
Hypercity Retail India Private Ltd. This company, will be a franchisee of Home
Retail Group and will develop and operate the multi-channel offering under the
HyperCITY-Argos brand name.


About Home Store + More

Home Store + More is an out-of-town retailer that provides a one-stop shop for
customer's homeware needs. Its stores are 20,000 square feet and sell over
15,000 homeware products offering large ranges of great value bedding,
towelling, tableware, cookware, kitchenware, household electrical appliances and
other home accessories.



About Home Retail Group

Home Retail Group is the UK's leading home and general merchandise retailer with
sales of over £5.5 billion in the last financial year. It sells products under
two distinctive and complementary retail brands, Argos and Homebase, which are
household names in the UK. Argos is a unique multi-channel retailer recognised
for choice, value and convenience and is the UK's leading seller of general
merchandise. Homebase is the UK's second largest home improvement retailer and
is recognised for choice, style and customer service across the wider home
enhancement market. Home Retail Group employs approximately 51,000 people, has
almost 1,000 stores throughout the UK and Republic of Ireland and serves over
200 million customers a year.





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