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
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

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

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'