Argos owner GUS signalled the break-up of its operations with the demerger of luxury goods-brand Burberry later this year.
GUS holds a 66 per cent stake worth more than £1 billion in Burberry and this will be distributed to its existing shareholders, who will be free to sell or keep the shares.
Burberry will remain a listed company.
GUS also disclosed an intention to separate the retail division that includes catalogue retailer Argos and DIY-chain Homebase from credit checking arm Experian in future.
However, it said both businesses would benefit from "further investment and support" and did not provide a specific timetable for any split.
GUS chief executive John Peace said the health of the UK retail market was one of the factors determining the timing, and a demerger would not be appropriate in the current climate. GUS said consumer spending had slowed sharply in recent months.
Chairman Sir Victor Blank said the demerger plan followed a strategic review and comes just 24 hours after Burberry said updated versions of its trademark check had helped drive a 17 per cent rise in annual profits to £164.4 million.
He said: "The board recognises that there is no strategic logic in maintaining Argos, Experian and Burberry within the same group in the long term."
The restructuring would only be carried out when conditions were right and disruption would be kept to a minimum at all its businesses, GUS said.
Details of the break-up emerged as GUS said pretax profits rose ten per cent to £910 million during the year to March 31, with all three of its divisions reporting record results. Sales were up seven per cent and profits ahead by ten per cent at the Argos retailing group, which includes Homebase, although this lagged behind the rate of improvement at Experian where sales leapt 16 per cent.
Evolution Securities analyst Nick Bubb said investors would be "mildly disappointed" by the announcement because hopes were high that Experian would be the first division to be demerged.
Justifying the overhaul, GUS said its record of taking action to boost shareholder value was good, with a £200 million share buyback programme completed and about £245 million raised from the sale of South African retailer Lewis Group.
The results show that overall turnover at GUS rose to £7.79 billion during the year from £7.55 billion, with Argos retail group contributing three quarters of sales.
GUS acknowledged that consumer spending has slowed in recent months and this had sent like-for-like sales of goods other than food and clothing into decline.
It was planning on the assumption that this trend in the market would continue at a time of rising costs including rates, wages and energy bills.
The company pledged to continue investing in the business, including the integration of the 33 stores acquired from catalogue retailer Index and extending the Argos chain to more than 750 outlets over the next four years.
