Retailers plunged into gloom by scale of global slowdown in consumer spending

Dire sales figures from Currys and B&Q follow collapse of Woolworths

The owner of the do-it-yourself chain B&Q and the electricals chain Currys piled further gloom on the retail sector yesterday as it recorded its first half-year loss in two decades and became the latest retailer to scrap its dividend.

DSGi said it wanted to preserve cash given the "recessionary environment". The pan-European group reported dire sales at Currys and PC World for the 24 weeks to 18 October amid "tough and volatile" trading conditions.

Kingfisher, which runs B&Q and the British outlets of the trade outfit Screwfix, said it would close its fledgling British Trade Depot chain and warned of plummeting underlying sales here and in China. It is the latest bad news for the retail sector, which saw Woolworths and MFI, the furniture chain, collapse into administration on Wednesday. Retailers are facing arguably the worst Christmas trading period in 30 years.

John Browett, the chief executive of DSGi, said the company was not planning to purchase Woolworths stores and there was "very little overlap" between the two retailers' product ranges. His forecast for Christmas on the British high street was downbeat.

"It is going to be very tough. Trading into that is going to be very volatile and we are going to see a lot of panicky actions on the high streets in terms of people being very worried."

He predicted more consumers would shift their spending to the post-Christmas sales, as had been the pattern during previous recessions. "We are expecting to see a pretty ropey Christmas but for us it is the two weeks after Christmas that are critical."

DSGi said that given the recessionary conditions, the outlook for peak trading and 2009 was "uncertain".

"We are prioritising cash generation as well as tightly managing stock, money margins and costs," Mr Browett said.

For the 24 weeks to 18 October, DSGi posted an underlying pre-tax loss of £29.8m compared with a profit for the same period last year of £52.4m.

DSGi's Britain and Ireland electricals division, which includes the out-of-town Currys stores and the high street Currys.digital stores, posted underlying sales were down 7 per cent for the 24-week period.

The company's British computing division, which includes PC World, said like-for-like sales had dropped 11 per cent over the same period.

Mr Browett said that the company's sales were being hit "across Europe". Hungary and Spain were the two worst performers with underlying sales down about 25 per cent.

On a brighter note, sales at DSGi's new format stores were exceeding the 15 per cent sales uplift target, compared to the performance of existing stores. DSGi has rolled out new format stores to 40 PC World, seven Currys and four Currys.digital stores.

Mr Browett said that the decision by credit insurers to scale back the insurance cover provided to DSGi's suppliers had not, so far, had any impact on its ability to get stock to the shelves.

At the half-year, DSGi had net debt of £149.5m, compared to cash of £101.3m at the same time last year.

For the 13 weeks ended 1 November, Kingfisher's group retail sales flatlined at £2.6bn and its retail profit fell 4 per cent to £176m, but this was ahead of expectations.

Ian Cheshire, the group chief executive of Kingfisher, said it had taken the decision to close its nine Trade Depot outlets in Britain to enable the company to achieve "higher and faster returns" from trade sales at its flagship B&Q chain and Screwfix, its trade-tool chain that boasts 130 stores.

In Britain, B&Q's total sales declined by 7.8 per cent to £887m and like-for-likes fell by 8.7 per cent.

Given the collapse of MFI and the troubles at other do-it-yourself chains, Mr Cheshire expected there to be an additional 5 per cent of capacity in the home improvement market over the next 12 months.

Mr Cheshire said: "We are very sad for those guys, but we have been predicting the failure of MFI for some time."

B&Q planned to recruit MFI staff, such as key show room sales staff, but it had no plans to acquire the furniture retailer's stores.

In China, Kingfisher revealed it had suffered an £18m loss and that underlying sales had dropped 32.2 per cent over the 13 weeks to 1 November as sales of new apartments nosedived.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
news
Arts and Entertainment
British author Helen Macdonald, pictured with Costa book of the year, 'H is for Hawk'
booksPanel hail Helen Macdonald's 'brilliantly written, muscular prose' in memoir of a grief-stricken daughter who became obsessed with training a goshawk
Sport
footballLive blog: Follow the action from the Capital One Cup semi-final
Life and Style
food + drink
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

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...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
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