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DUBLIN, Jan 19 (Reuters) – British supermarket group Sainsbury’s ( SBRY.L ) said on Thursday it would exit its Argos general merchandise business from the Irish market, closing 34 stores there and cutting 580 jobs.
The group said it intends to close all Argos stores and operations in Ireland by the end of June.
In 2016, Sainsbury’s bought Argos, which sells toys, technology and consumer electronics, for £1.1 billion ($1.4 billion).
The strategy in the UK is to close most Argos stores while opening stores in Sainsbury’s supermarkets. However, the group does not have supermarkets in Ireland.
“Argos has concluded that the investment required to develop and modernize the Irish business unit is not viable and that the money would be better spent on other parts of the business.
A Sainsbury’s spokesman said Argos’ withdrawal from Ireland had nothing to do with Brexit.
Sainsbury’s said there would be no change to Argos in Northern Ireland, Scotland, England and Wales, with the 253 independent sites and 422 stores within Sainsbury’s supermarkets operating well.
The group said Argos workers in Ireland will benefit from an enhanced redundancy package that goes beyond statutory obligations.
The Compulsory Trade Union expressed its displeasure at Sainsbury’s decision.
Sainsbury’s, whose shares fell 18 percent last week, reported better-than-expected Christmas sales.
(Reporting by Conor Humphreys in Dublin and James Davie, William James and Paul Sandle in London)
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