Retailer puts faith in large store strategy
Jun 25 2010 Huddersfield Daily Examiner
THE owner of Currys and PC World said it planned to reduce the number of UK stores to about 500 following the success of larger store formats.
DSG International, which has 650 shops in the UK, said most of its estate will be out-of-town superstores which can accommodate its recently-introduced 2-in-1 Currys and PC World format.
It said those combined stores already open under DSG’s transformation plan were proving popular after profits rose by up to 50%.
The group, which is two-thirds of the way through a three-year revival plan, showed the benefits of the shake-up as it reported a 61% rise in underlying pre-tax profits to £90.5m for the year to May 1.
Like-for-like sales were up by 2% after rising by 6% in the second half of its financial year.
DSG returned to the black with profits of £112.7m against losses of £123.6m a year earlier.
DSG’s recovery comes as it faces up to increased competition following the arrival in the UK of American electronics firm Best Buy.
Former Tesco director John Browett, who took over as chief executive in late 2007, has steered the business through a savage recession and put the firm’s balance sheet in order with a cash-call on shareholders.
He said the business made “excellent progress” over the last 12 months, despite recessionary pressure across Europe.
Mr Browett added: “We are now two years into the renewal and transformation plan and are encouraged by the improved profitability and competitiveness it continues to deliver.”
The company has a total of 1,275 stores, including outlets in Norway, Italy and Greece.
Total sales in the UK and Ireland were down by 5% to £4bn – but the figure was 3% up on a like-for-like basis in the second half. Underlying profits in the UK division increased by 21% to £71.1m.