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DSG UNVEILS PLANS TO SPICE UP CURRYS

Electrical goods store Currys is set for a makeover

Friday May 16,2008

By Peter Cunliffe, Deputy City Editor

CURRYS and PC World shops are to get a makeover and as many as 77 smaller stores could close under turnaround plans unveiled yesterday by DSG International’s new boss.

Former Tesco executive John Browett unveiled a wide-ranging review of the group, formerly called Dixons, intended to drive up sales and profits on the high street and the internet.

He stopped short of the radical break-up some analysts had predicted, but outlined a three-year programme that will see store revamps, staff retraining and £50million of cost savings in the first year.

Browett said: “This is a fundamental shift. We are going to make the business almost unrecognisable compared with what it is today.

“The business hasn’t really kept pace with how customers shop. We’ve lost our edge as a specialist retailer.”

He predicted internet sales would double to 30 per cent of the electrical goods market within five years and said DSG would keep pace.

But he added: “We don’t see online replacing stores entirely.

“People want to go out and socialise, they want to touch and feel products and they want a salesperson who can explain products to them.”

Up to 77 of the smaller 177 Currys.digital stores could close over the next five years, and analysts estimated perhaps
a quarter of DSG’s 1,600 head office jobs could go too.

Staff will be retrained by Christmas, using methods from the group’s successful Elkjop chain in Scandinavia, and new incentive schemes will be introduced.

The company’s plans got a lukewarm reception from the City and DSG’s shares tumbled 5bp to 64p.

The dividend payment is to be slashed by half to conserve cash and £395million of assets are to be written off, mainly at the troubled UniEuro business in Italy.

DSG repeated its guidance on annual profits of about £205million, down from £295million a year ago.

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