Bottom Line: Prey for bears

DIXONS' foray into the US has produced so many disasters that something as mundane as a new method of accounting for its investment there sent its shares down 7p to 200p yesterday.

The market's suspicion is understandable. Instead of treating its 30 per cent stake in Fretter, the electronics retailer which bought its troubled Silo chain, as an associated company - taking its share of Fretter's results into its profit-and-loss account - it will treat it as an investment. That means it will only account for dividends received on the shares and its dollars 45m holding preference stock.

The bears concluded that Dixons was trying to hide disappointing results and concluded that the Silo disaster was not yet over. That was not borne out by respectable dollars 8.1m profits shown in the fourth-quarter figures - albeit over the buoyant Christmas period - while there have been cost savings from combining head offices and selling stores.

Unfortunately for Dixons it will be at least a year before it becomes clear whether that has been enough to improve the performance. Until then it will remain vulnerable to the bears.