By Jonathan Davies

Homebase has said it will close 25% of its stores by 2019 following a company review.

The retailer, owned by Home Retail Group, said the stores will be closed after it found a number of its 323 stores are "unprofitable or are in decline".

Home Retail Group, which also owns Argos, reported pre-tax profits of £13.5m for the first half of the year, a 5% fall on the same period last year.

The figures suggest raising costs or weaker sales in new stores as both Argos and Homebase reported like-for-like sales increases. Argos saw sales up 2.9% and Homebase 4.1%.

Home Retail Group chief executive John Walden said: "As always, the full-year outcome will depend upon the important Argos Christmas trading period".

But he stressed that the group is on course to meet market expectations.

Meanwhile, Homebase managing director Paul Loft announced he is to step down from the role, staying on until a successor can be found.

The group's share price fell as much as 6% in early trading, but recovered slightly.

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