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03 Jan 2008
Electricals retailer Dixons Store Group International (DSGI) has seen its share price plunge by over 20 per cent after branding trading in the festive period as ‘disappointing’.
Like-for-like sales for the 11 weeks to 29 December were flat on an annual comparison in the UK and Ireland and down 1 per cent at a group level.
As a result, the retailer, which recently signed a partnership with Dell, has slashed its full-year pre-tax profit expectations by £40m to £50m.
The announcement comes shortly after an analyst from Credit Suisse predicted that John Browett, the retailer’s new chief executive, could shut up to 200 of DSGI’s 700 UK stores.
Poor demand for laptops in the UK in the pre-Christmas gifting period was cited as a key factor behind the shortfall. DSGI also admitted sales of accessories were lower year-on-year, with games consoles and digital photo frames highlighted as two of the few bright spots.
Sir John Collins, group chairman of DSGI, confirmed in a statement: “Total Group sales were up 5 per cent, however like for like sales were down 1 per cent reflecting generally weaker consumer environments across many of our markets.
“Overall trading for this important period, in which over half our annual
profits
are usually generated, has been disappointing, particularly in the UK, Italy and
Spain. This weaker trading, together with a more cautious outlook for the
balance of the year, means that we now expect full year profits before tax to be
some £40 - £50million lower than current expectations.”
Collins added that DSGI’s e-commerce arms, Dixons.co.uk and FotoVista, performed well during the period, with sales up 31 per cent year-on-year.
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