DSG falls into red despite Midland store boost

Jun 26 2009 by Graeme Brown, Birmingham Post

Currys and PC World owner DSG International racked up losses of £140.4 million last year despite a boost from the UK’s largest electrical store in Wednesbury.

DSG’s losses in the year to May 2 were driven by one-off items – mainly turnaround costs and the lower value of European businesses – but were less than the £184.1 million seen in the previous period.

Pre-tax profits without the exceptional items showed a fall of 77 per cent to £50.5 million, reflecting a nine per cent decline in like-for-like sales during a time of “significant change” for the company.

However, the company revealed its first megastore, which opened at Junction 9 in Wednesbury in October, generated sales of £2.3 million on its opening weekend and is expected to generate approximately £30 million of sales per annum.

The firm warned markets were set to remain tough in the year ahead but said it had completed a fundraising from shareholders and was “well prepared” .

Chief executive John Browett added that the company had achieved rapid progress with its store refurbishment programme.

DSG said its UK and Ireland division had seen comparable sales fall 11 per cent in the year. It said Currys had moved to cut the prices of its televisions in July last year to bring them in line with the internet. The chain also tried to slash its stock levels as a response to reduced customer demand.

Currys saw a “very tough” market in the crucial weeks before Christmas, but DSG said this was followed by a better-than-expected sales period.

The group sounded a positive note on recent trading saying that while white goods had suffered particularly as a result of the housing market downturn, sales had “shown signs of stability” towards the end of the year.

Mr Browett said: “We are well positioned to emerge from the recession with a compelling offer for customers.”