J Sainsbury Plc has agreed to sell its Argos general merchandise unit to Swift Partners, a new company backed by retailers including former Co-op boss Richard Pennycook, for £120m.
The sale will allow the supermarket chain to focus on its core grocery business. Argos, which has been struggling in recent years, will continue to operate under the new owner.
Under the terms of the deal, Argos stores will remain inside Sainsbury's shops, and the business will still sell Habitat products and offer Nectar points.
Sainsbury's described the agreement as business as usual for Argos customers, with the brand expected to keep trading as it does now.