Sainsbury’s has confirmed it will divest its Argos retail business in a deal valued at £120 million. The transaction marks a major shift in strategy for the supermarket giant, which originally purchased Argos from the Home Retail Group in 2016 for £1.4 billion.

The sale price highlights a substantial loss on the initial investment made eight years ago. While Sainsbury’s has not yet released a detailed breakdown of the strategic reasoning behind the specific valuation, the move follows a period of restructuring within the UK retail sector. The deal is expected to be finalized pending standard regulatory approvals and closing conditions.

Market analysts are currently evaluating how this divestment will impact Sainsbury’s balance sheet and its future focus on core grocery operations. The discrepancy between the acquisition cost and the current sale price has drawn attention to the changing landscape of high-street retail, where physical catalog-based stores have faced increasing pressure from digital-first competitors. Further details regarding the transition of assets and staff are expected to be disclosed by the company in the coming weeks.