Electronics Boutique stock tumbles

Shares in Electronics Boutique plunged by 42 per cent yesterday after the computer games retailer issued a profits warning caused by having to cut the price of Sony PlayStation games.

Shares in Electronics Boutique plunged by 42 per cent yesterday after the computer games retailer issued a profits warning caused by having to cut the price of Sony PlayStation games.

Electronics Boutique said it cut the price of some games to £29.99 last month compared to the usual £34.99-£39.99 after rivals such as Woolworths began discounting. Sales are up by 25 per cent on last year but this has been insufficient to make up for a six percentage point fall in gross margins.

Christmas sales are unlikely to make up the lost ground, the company added, despite the recent launch of the Sega Dreamcast console. Electronics Boutique said it is well positioned to cash in on Dreamcast, but warned that like-for-like sales volumes had not offered a balance for the price drop in PlayStation games, which account for almost a third of EB's total sales.

SG Securities nearly halved its full-year pre-tax profit forecast to £13m from £23m.