Sainsbury's committed to Home Retail acquisition despite Brexit
Sainsbury's is still committed to the purchase of Home Retail Group, the owner of Argos, despite the uncertain environment following the Brexit vote and the possible risk of a recession. Chief exec, Mike Coupe, said that people should not pay too much attention to initial post-Brexit surveys that indicated a dip in consumer confidence after the event. 

Sainsbury's says Brexit doesn't change rationale of Home Retail deal

By James Davey

LONDON, July 5 (Reuters) - Sainsbury's boss said he remained convinced of the rationale for the supermarket's proposed purchase of Argos-owner Home Retail despite increased economic uncertainty after Britain's UK's vote to quit the EU.

Chief Executive Mike Coupe also flagged a risk that talk of a recession after the vote to leave the 28-member European Union could prove self-fulfilling.

"There is a danger that we'll talk ourselves into it," he told reporters on Tuesday after Sainsbury's published a 188-page prospectus for the 1.4 billion pounds ($1.8 billion) Home Retail acquisition.

"Clearly the economic conditions have changed (post referendum) and we have to recognise that in the documentation," he said.

Some analysts have said that by becoming Britain's biggest non-food retailer Sainsbury's will be more exposed to discretionary consumer spending which could be dented by the current economic and political uncertainty.

But Coupe warned against paying too much attention to initial post-Brexit surveys which have indicated a dip in consumer confidence.

"To predict the future off 10 days' worth of data I think is impossible," he said.

Sainsbury's hopes to complete the Home Retail deal in September. However, it is currently being considered by the competition regulator, which said in May it would decide by July 25 whether to launch a full investigation.

"We remain absolutely convinced by the strategic rationale of the deal and we think it will strengthen our business," said Coupe.

"We believe that we can still deliver against the synergies and the execution that we've outlined in the document, regardless of what economic conditions prevail."

The cash and shares deal was agreed in April and at the time was worth about 1.4 billion pounds. However, Sainsbury's shares have fallen 19 percent over the last three months, reducing the deal's value.

The prospectus lays out Sainsbury's plans to open more Argos concessions and more 'click & collect' sites, creating a net 1,000 or more retail roles. However, it to reduce corporate and support roles where there is duplication.

The prospectus cautioned about the potential post-Brexit risks to the U.K. economy and Sainsbury's markets.

Finance chief John Rogers said this was standard practice.

"It's sensible to include a risk that captures the volatility of the economic environment... We've called Brexit out specifically because that's something that's very current in the economic backdrop," he said.