Departing CEO has done Dixons a service

Following the news that John Browett is to leave Dixons to head up Apple Retail in the US, an American friend emailed me yesterday in puzzlement. When he last looked, there was a large gulf between the level of service he might expect at Apple and the level of service at Dixons.

"What‘s the lowdown," he asked?

My friend is right that Dixons was a retail chain built on price not service. Its founder, Sir Stanley Kahms, gave customers low prices and then sold them extended warranties to make up his profits. Sir Stanley did not believe in any of this internet nonsense, and retired before the scale of his error became apparent.

By 2007 internet retailers were making heavy inroads into Dixons' core market. The solid balance sheet which Sir Stanley had left behind had been spent acquiring loss-making retailers across Europe, mostly in countries whose economies tanked following the financial crisis.

With the group in dire straits, John Allan and John Browett were appointed as chairman and CEO respectively. They gave away or shut the worst of the loss-making subsidiaries, and John Browett set about changing what I have heard him call the group's "ambivalent relationship with its customers" by retraining staff and refurbishing stores.

Currys and PC World, the group's trading brands in the UK are now much more attractive places to shop than five years ago. Turnover was down over Christmas, but it fell less than at competitors such as Comet or Game.

Although Amazon are hot on their tail, Dixons are still the largest retailer of electronics in the UK, and the stores which John Browett leaves to his successors are better than the ones he took over.

Mark Needham (pictured) is founder of Widget UK