Dixons Retail touts sales of iPad 2 and big stores
Friday 13 May 2011
Dixons Retail, the owner of the Currys and PC World chains, yesterday boasted soaring sales of Apple's latest iPad device and said its UK business had outperformed the market, despite the pan-European group suffering a slump in revenues in its second half.
John Browett, the chief executive of Dixons, which has issued two profit warnings this year, also said he expected trading conditions in the UK market to pick up once people feel more confident about their job prospects.
Dixons posted a 3 per cent fall in its UK and Ireland like-for-like sales over the year to 30 April, which comprised a fall of 7 per cent over the last 28 weeks but a 2 per cent rise in the first half, boosted by the football World Cup.
While the market leader faces strong headwinds from consumers cutting back on purchases of big-ticket items, Dixons' UK performance is considerably better than that of rival Comet.
On Wednesday, the Kesa Electricals-owned chain posted a disastrous 15.2 per cent decline in like-for-like sales between 9 January and 30 April. Following the departure of Comet's managing director Hugh Harvey last week, Kesa is to close 12 service centres in the UK and up to 10 stores in an effort to save £10m a year.
Mr Browett said Dixons had "outperformed the market" in the UK and was bullish on sales of the new iPad 2, launched in the UK on 25 March. He said it had been "fully stocked" with iPad 2, which retails for £399, last Friday but had nearly sold out by the end of Sunday: "It looks like iPad 2 will become a bigger product than iPad 1."
After a positive response from customers, Dixons is to push ahead with rolling out its large Currys megastores, most of which are combined two-in-one outlets with PC World.
Dixons has 25 megastores in the UK and, as part of its plans to refurbish between 55 and 60 stores before its Christmas trading period, it will add up to a further 20 of the big-box stores. The stores are over 30,000 square feet.
Across Europe, the group has a total of 60 megastores, with average annual sales of £20m. Group sales at Dixons fell by 2 per cent over the year, while they were down by the same amount on a like-for-like basis. Its star performer was the Nordic region, which grew underlying sales by 9 per cent.
In line with guidance at the time of its profit warning on 30 March, Dixons Retail said it expects to post annual pre-tax profits of about £85m. Its shares shaded 0.01p to 15.99p.
Mr Browett described the consumer-spending environment in much of Europe as "fragile" but said he hoped for better trading in the UK around the end of the year. He said: "The thing that it depressing sales is around when people feel confident that they have got a job and I think that will come at some point either at the end of this year or the beginning of next."
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