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
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
politicsIs David Cameron trying to prove he's down with the kids?
Dominique Alderweireld, also known as Dodo de Saumure, is the owner of a string of brothels in Belgium
newsPhilip Sweeney gets the inside track on France's trial of the year
Cumberbatch was speaking on US television when he made the comment (Getty)
Life and Style
Arts and Entertainment
Tom DeLonge, Travis Barker and Mark Hoppus of Blink-182 pictured in 2011.
musicBassist Mark Hoppus and drummer Travis Barker say Tom Delonge is 'disrespectful and ungrateful'
Arts and Entertainment
Olivia Colman and David Tennant star in 'Broadchurch'
tvBroadchurch series 2, episode 4, review - contains spoilers
cyclingDisgraced cycling star says people will soon forgive his actions
Britain's Prince Philip attends a Garden Party at Buckingham Palace in London
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Ed Sheeran will play three sell-out gigs at Wembley Stadium in July
Lena Dunham posing for an official portrait at Sundance 2015
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
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: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea