DSG chief vows to turn around fortunes after loss of £193m

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The Independent Online

The electricals group DSGi reported an annual loss yesterday after a large-scale restructuring at its struggling Italian unit. But its chief executive, John Browett, vowed to turn around its ailing UniEuro chain in Italy and flagging PC World chain in the UK.

For the 53 weeks to 3 May, the group delivered a total pre-tax loss of £192.8m – compared with a profit of £114.1m in the previous year – which was largely associated with the group's Italian business, where like-for-like sales tumbled by 11 per cent over the year.

DSGi, which owns the Currys, PC World and Dixons.co.uk brands in the UK, posted underlying pre-tax profits – before amortisation, net restructuring and impairment charges – down 30 per cent to £205.3m for the 53 weeks to 3 May. Total group sales rose 8 per cent to £8.6bn and group like-for-like sales rose by 1 per cent.

On Italy, Mr Browett said: "The retail basics were not right there." To turn around its fortunes, he said the group was making changes, such as enhanced ranges and pricing and improved on-shelf availability.

Previously, DSGi had announ-ced plans to close 43 UniEuro stores over the next two years.

At PC World in the UK, Mr Browett said its performance had been affected by an "over-stock" of laptops in the first half of the year that led it to increase promotional activity, which affected margins. Like-for-like sales at its UK computing division fell 5 per cent over the year.

PC World has been affected by a shift in the IT market, with more general retailers selling computers and peripheral devices. Mr Browett said: "You can buy memory cards from anyone – you can actually buy them from the corner shop. We were a bit slow to respond to some of these [changes]." He also said sales had been lost because DSGi did not get "our fair share" of hardware and software titles for computer games for Nintendo and Sony PlayStation, which chose to sell more of their products in other retailers' stores, such as Game.

Its Currys business, including the Currys.digital high street chain, in the UK had a strong start to the year, but the second half was more challenging.

On the outlook, Mr Browett said: "The short-term environment is tough and it will reduce our returns." But he said DSGi was taking steps to improve in-store customer service in its UK stores.