DSG to close 77 Currys outlets and slash dividend - Business News - Business - The Independent

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.

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week