DSG to close 77 Currys outlets and slash dividend

John Browett, the new chief executive of DSG International, is to slash the company's dividend, close underperforming stores and try to improve customer service as he attempts to transform the fortunes of the Currys and PC World-owner.

Mr Browett, headhunted from Tesco last autumn, claimed yesterday that the conclusions of the business review he has conducted at DSG would "transform the very DNA of our business over the next three years".

Analysts said he faced an uphill battle. DSG has issued two profit warnings this year as consumer spending on electricals has slowed, and faces an increasing threat from online competitors, which Mr Browett expects to triple their market share to 30 per cent within three years.

DSG also faces intense competition from Best Buy, the giant American business, which plans a joint venture in the UK with Carphone Warehouse to launch electrical superstores.

Nick Bubb, a retail analyst at Pali International, praised Mr Browett's "energy and enthusiasm" but thought that his plans were doomed to failure. "Given the economic background, things will get worse for the group before they get better – profits will fall sharply this year," he said. "The housing market and consumer slump are likely to swamp the efforts of the new management team to turn things around."

Mr Browett's strategy includes the closure of 77 of the 177 Currys.digital stores, the former Dixons outlets that trade in high street locations, as their leases expire over the next five to six years. DSG also plans to revamp stores across the PC World, Currys and Currys.digital brands, and is trialling new larger stores.

Smaller shops will no longer sell white goods or personal care products, with the space reallocated to more comprehensive ranges of laptops, televisions and other digital products. Staff are to be given more training on advising customers, and DSG plans to step up its online operations.

Mr Browett said DSG would retain its troubled Italian retail business, but plans a strategic review of other operations, including units in central Europe and Spain. Cutbacks in the head office are expected to save £50m this year, with further cash freed up by a halving of the dividend paid to shareholders in the current financial year. Next year's dividend is likely to be only marginally more generous.

The new chief executive admitted that the announcement that Best Buy, previously thought to be considering a bid for DSG, would enter the UK market in 2009 with Carphone had "galvanised" his plans. Mr Browett is also concerned about competition from Sainsbury's, which is to increase its efforts to sell electricals through its online business.

Paul Deacon, a retail analyst at Landsbanki, said: "Our initial reading of this is that it is unlikely to impress the market – store closures in Italy have already been announced, and the only other closures are 77 small high street stores."

Insiders at DSG insisted they had expected a lacklustre response from analysts focused on figures rather than the change of culture that Mr Browett claims he will achieve at the company. "It is up to us to deliver now and the proof will be in the pudding," one said.

DSG has around 700 retail outlets in the UK. It revealed yesterday that total sales over the 2007-08 financial year had risen by just 1 per cent on a like-for-like basis, with a 6 per cent slump in sales at its computing business. Trading deteriorated across almost every area of the business during the second half of the year.

However, Mr Browett pointed to the success of DSG's online business, which remains the biggest electrical retailer on the internet in the UK and which has posted a 27 per cent increase in sales over the past year. He also conceded that the company had not "kept pace with its core customer needs", a thinly veiled criticism of John Clare, the former DSG chief executive, who retired last year.

Start your day with The Independent, sign up for daily news emails
Life and Style
Fans line up at the AVNs, straining to capture a photo of their favourite star
life Tim Walker asks how much longer it can flesh out an existence
Life and Style
Every minute of every day, Twitter is awash with anger as we seek to let these organisations know precisely what we think of them
techWhen it comes to vitriol, no one on attracts our ire more than big businesses offering bad service
Professor David Nutt wants to change the way gravely ill patients are treated in Britain
people Why does a former Government tsar believe that mind-altering drugs have a place on prescription?
Norway’s ‘The Nordland Line – Minute by Minute, Season by Season’ continues the trend of slow TV
Arts and Entertainment
Jonny Evans has pleaded not guilty to an FA charge for spitting at Papiss Cisse
Life and Style
Kate Moss will make a cameo appearance in David Walliams' The Boy in the Dress
The image released by the Salvation Army, using 'The Dress'
Liverpool defender Kolo Toure
football Defender could make history in the FA Cup, but African Cup of Nations win means he's already content
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable