Pursuit of expansion leads DSG to fresh territories

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The Independent Online

In a multi-pronged expansion, DSG International is moving into new markets beyond electricals and outside Europe in an attempt to reserve its place in the global retailing super league, its chief executive declared yesterday. John Clare said he wanted the group behind Currys and Dixons.co.uk to be in the "front line" as retailing "goes global".

Mr Clare said he wanted to "push the boundaries" behind DSG's core electricals market and has started by selling books, stationery and toys in some of the group's southern European stores.

He announced his ambitions alongside full-year results boosted by a pick-up across most of the 13 countries in which the firm operates. A 50 per cent increase in laptop sales during the year meant sales of portable PCs outstripped those of desktop models for the first time by value.

DSG also said it had agreed to offload its 60 per cent share in the mobile phone chain The Link for a low £30m to O2, the telecoms operator that owns the other 40 per cent. The price was at the bottom of analysts' expectations and comes after profits at The Link, which has suffered as handset subsidies from network operators dried up, collapsed to just £600,000 from £37.5m a year earlier.

Mr Clare said mobile phones had been "non core" for DSG since penetration in the UK reached saturation. He did not disclose the terms of the deal, but O2 is expected to close many of the chain's 300 stores.

The group, which has an option to acquire the Russian retailer El Dorado, is looking "beyond Europe" for more acquisitions. It is talking to potential partners in the Middle East, India and Asia that it could work with and later snap up, Mr Clare said. The only three major markets not on DSG's agenda are the US, France and Germany. He said he would love to buy his biggest German rival, Media Markt, if only it was for sale. He ruled out buying Darty, the French electricals chain owned by Kesa Electricals, on price grounds.

As for expanding beyond electricals, Mr Clare added: "You watch this space. We've got an interesting set of products we'll be trying over time." Office supplies and lighting are two areas being tested in the UK.

In the year to 29 April, pre-tax profits fell 9 per cent to £302.9m. Excluding exceptional items and operations it is exiting, profits before tax rose 8 per cent to £317.6m. Shares dipped 8.5p to 184.75p after 16.5 million shares were placed by Morgan Stanley for an institutional investor.