Strong iPad sales add to Dixons confidence


Strong iPad sales add to Dixons confidence

Simon Quicke

The recovery remains fragile and consumer confidence shaky when it comes to selling technology via retail with Dixons revealing that although things are getting better it is taking time.

The retailer has issued some guidance around its yearly numbers, which will be announced next month, showing that although there had been a slump in the second half of the year there were reasons to be more positive about the future with iPad 2 sales doing a fair bit to help out.

Dixons Retail has issued a couple of profit warnings already during the course of this fiscal year, the last being in March, but had a calmer message for the markets with a 3% drop in likke-for-like sales in the UK and Ireland for the year that ended 30 April.

The company stated that pre-tax profit would be about £85m, which sticks with the guidance it gave in March. As well as enjoying strong sales of Apple's iPad the retailer has also been busy pruning its operations and revealed it had managed to make cost savings of £50m.

John Browett, chief executive at Dixons Retail, said that it had been tough but it was pleased with the UK business performance.

"Market conditions have been challenging in many of our markets this year. Our businesses have responded to our customers needs enabling them to improve their market positions, particularly in the UK, Nordics, Greece and Italy," he said.

"With challenging economic headwinds continuing for many of our customers, we remain cautious on the outlook for the year ahead. Having had a strong World Cup performance as well as the exclusivity of the iPad last year, we have tough comparables ahead. However, through our Renewal & Transformation plans, our businesses are well placed to emerge from the current weak consumer environments ahead of our competitors," he added.

As well as the ongoing fragility in the economy the retailer has faced increased competition from Best Buy, which has opened a series of large stores competing on retail parks often co-inhabited by PC World.

Dixons has plans to add to its national network of 25 megastores, which are a combined Currys and PC World, with the intention to open a further 20 stores by Christmas.

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