Currys and PC World report drop in sales

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The Independent Online

Currys and PC World owner DSG International today revealed a 10 per cent drop in quarterly sales after shoppers put off purchases until after Christmas.

The group's UK and Ireland electricals business suffered a bigger decline in comparable sales in the 12 week period to 10 January- down 12 per cent, while UK computing was off 13 per cent.

The trend for consumers to wait until the January sales to snap up TVs and technology helped lift like-for-like sales in the final two weeks, ahead 2 per cent across the group.

But DSG said it was braced for the negative sales trend to continue in a "challenging" 2009 and was cutting costs to offset the tough trading.

It is trimming an extra £20 million from its cost base - bringing the total in the current year to £95 million.

DSG said it will not retain some of the temporary staff hired over the Christmas period as part of its efforts to save cash.

It also hired less temporary workers over the festive shopping season.

DSG said trading in its new store formats - which include its new 55,000 sq ft Currys megastore near Birmingham - exceeded management expectations.

The group said sales in the new and revamped stores were 15 per cent to 25 per cent ahead of the rest of the chain.

A portfolio of 41 updated PC Worlds, 11 Currys Superstores, four Curry', the new Currys megastore and a trial PC World and Currys superstore in Weybridge, Surrey, were all trading through the peak season.

It hopes the new Birmingham Currys megastore, launched last October, will generate more than £30 million in sales a year.

John Browett, DSG chief executive, said: "The sales pattern through the period was as we anticipated with customers waiting for the post Christmas sales to purchase discretionary products, particularly televisions and laptops.

"Our Renewal and Transformation plans continue to progress well. Early results from the new store formats, which have now traded through peak, have continued to exceed our expectations and give us confidence that our plans are delivering for our customers."

However, group profit margins were hit - falling 0.8 per cent year-on-year - as trading was weighted towards the post Christmas sales and as demand increased for lower margin televisions and laptops.