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PC World and Currys owner DSG International today reported a collapse in sales in Britain and sold its stores in Poland for just €1.
Computing sales fell 15% at PC World in the UK and there was a 14% slump in the electricals division in the 16 weeks to 22 August as the firm was hit by the recession.
DSG also pulled out of Poland, selling its eight loss-making Electro World Poland stores for €1, but said its overall sales decline eased over the summer helped by strong growth in the Nordic region.
Shares surged 7% or 2p to 29p having plunged below 15p in January.
The firm said group sales fell by a not as bad as feared 6% in the 16-week period compared with a 9% drop in the prior financial year.
“Given the challenging environment, this is an encouraging start to the year,” said chief executive John Browett. “We remain cautious about the economic outlook.”
Analysts said the decline in sales was better than the 7% to 11% expected in the City driven by a 9% rise in Scandinavia. The UK performance was in line with expectations.
Singer analyst Matthew McEachran said the results were “encouraging”.
Browett blamed the 15% plunge in sales at PC World on “significantly lower” sales to businesses as a result of the recession.
A quarter of customers at PC World are small businesses, many of which have put spending on hold.
Sales of electrical goods were also down sharply in the UK as DSG struggled against tough comparisons with a year ago when TV prices were slashed to help it compete with the internet.
Efforts to revive sales have been blunted by the slowdown in consumer spending and rising unemployment, and the firm has braced investors for continued declines until 2011.
The CBI recently reported subdued sales on the UK high street over the summer as job losses limited the pace of economic recovery.
The British Retail Consortium last month called for a white goods scrappage scheme to boost consumer take-up of energy-efficient items from fridges to washing machines such as those sold by Currys.
But DSG said it was more optimistic about the economy than it was three or four months ago when the end of recession still looked a very long way off.
The firm raised £310.6 million from investors earlier this year to speed up its store revamp programme in the UK and it has now refitted 108 of its 700 outlets throughout Britain with another 60-80 to go before the end of the year.
The five-year transformation plan also includes greater product ranges and staff training.
DSG faced angry shareholders today at its annual meeting where investors were set to vote on a new “salary sacrifice” scheme for directors to replace 25% of their wages with share options for the current financial year. The scheme has provoked opposition from pension fund advisory group PIRC because it is not performance-related, although the plans looked set to win support from major shareholders at the meeting.
Reader views (5)
I don't understand how PC World is still in business. Whenever I pop in to browse there is hardly anyone else in there, apart from sales assistants and security staff. Their biggest problem is price. Their prices are uncompetitive. When I can order something from Amazon or another online retailer and get it delivered to my door within a day or two for a few pounds extra (but often for free), why would I drive 15 miles to a PC World? I only pop in when I'm in the area anyway. The only time I can recall buying something there I bought a DVD writer and there was a major quibble about the price. The shelf ticket said one price, the till rang up a higher price. Cue the manager and a ream of excuses why he could charge the higher price. So, no, I don't understand how they are still in business.
- Mike Mitchell, Spalding, England
Build your own computers; they are not hard to build at all, and you get much more for your cash.
And once you have built your own; you will know how to repair it free of any more future charges.
I have found stores like PC World only employ sales-persons; whom most know nothing at all about what they sell etc.
I agree with Thomas Hayes; soon computers will only be used for emails, and personal photos etc, by the general public.
Even then; your emails will be read by Big Brother, and your photos added to the Government anti-terrorist Database as possible subversives.
If a product is very good; the public will buy it; recession or no recession; if it’s not very good, nobody other than fools, will buy it etc.
A bad workman always blames his tools; they say.
- Mickinlondon, london
Currys is s showroom and nothing more, if you want to know what a product looks like and whether it would suit your home then go and have a look, then go home and buy it cheaper on the internet.
- Bob, Cheam
No surprise to me that PC World sales are down. I tried to buy a Hewlett Packard PC of a quite specific specification from one branch. It was shown, in branch but not on website, as an end of line model and reduced. I was told that they were just selling through the display stock, hence the reduction. I didn't want the ex-display model, so took an interest in the in the replacement model, effectively, even though it was more expensive than the other. Not in stock.
In stock at another branch. Went to the other branch, found the "discontinued" model actually priced at the lower price as the other branch but being sold as a current model. Took one...
...I thought. Then they decided that I must take out their damage and repair insurance, which I politely declined.
My polite refusal turned into me;
a) Not knowing anything about computers
b) Being "stupid" for not taking out the insurance
c) Being "stupid" for not taking a free set of speakers (that I didn't want) if I took out the insurance.
I retrieved my card and left the shop. Sent a formal complaint, two months ago now, and have heard nothing.
- Escobar-Alop-Lop, Camden County
Things will get worse as sales fall due to the clamp down on file sharing and other restrictions.The only other uses for having a computer will be to send E Mails and very soon, that too will be subject to charges and other discouraging introductions. Capitalism at work !
T H Leds
- Thomas Hayes, Leeds UK
