DSGi reseller biz stuck in doldrums as retail picks up

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DSGi reseller biz stuck in doldrums as retail picks up

Microscope contributor

The critical Christmas buying period smiled on DSGi's retail business as sales picked up but its B2B reseller division continued to suffer weak demand.

In an update to the City this morning, the group said total like-for-like sales grew 8% year-on-year in the 12 weeks ended 10 January including a 5% rise in the UK and Ireland operation as stock turns increased 10%.

The UK and Ireland Electricals (Currys, Currys.digital and Dixons Tax Free) saw revenues go up 8% while the Nordics, other International operations and e-commerce sales grew 18%, 5% and 15% respectively.

"Customer response to Christmas and the sale has been even better than we expected with strong demand across all categories and countries," said John Browett, DSGi chief executive.

In May 2008, the group embarked upon a three-year Renewal & Transformation programme that included refitting stores to create Megastores and 2-in-1 stores, it also plans to cut £200m over a four year time frame.

Browett said today's results indicated "the action we are taking to revitalise the business" was paying off.

However the UK computing unit, which comprises PC World, DSGi Business and The Tech Guys, experienced a 5% drop in sales due to "continued weakness of the B2B market" despite some uplift from Windows 7.

The year ahead will continue to an uphill battle as credit continues to be an issue for small businesses and many hold off making technology purchases.

"We expect 2010 to be tough across Europe and notably in the UK given the economic environment. However, we expect to continue to benefit from the self help of our Renewal & Transformation plan," said Browett.

The group revealed today it is entering into a period of consultation with its UK defined benefit pension scheme members and plans to close it to further accruals.

 

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