DSG International (DSGi) has posted a hefty loss for the year ended 2 May 2009 as the downturn continues to bite.
The firm, which has been hit by several credit insurance reviews this year, revealed in its financial year-end statement that it had identified a further £200m in cost savings over the next four years.
It saw group turnover drop one per cent to £8.2bn for the year compared with £8.3bn in 2008, with a loss of £140.4m compared with £184.1m in 2008. This took into account a one-off restructuring charge of £190.9m.
Sales for the firm’s Computing division, which encompasses PC World, DSGi Business and The TechGuys dropped 14 per cent to £1.5bn. DSGi Business turned over £325.8m compared with £397m last year. Profit for the whole division stood at £41m compared to £63.2m for the previous year.
However, the firm revealed its store transformation programme was going well, with 101 "reformatted" stores due to be opened this year in the UK. According to the statement, refurbished stores are performing well, delivering gross profit uplifts of between 11 per cent and 65 per cent compared with the rest of the chain.
DSGi also claimed its e-commerce division profits doubled to £15m.
The retail giant also said it had made ‘good progress’ on its step change programme – reducing costs by £95m in the 2008/2009 financial year with the aforementioned £200m of cost savings over the next four years to come.
John Browett, chief executive of DSGi, said: “This has been a year of significant change for the group. We have taken wide-ranging actions to reorganise and restructure the business as well as implementing our Renewal and Transformation plan.
“We are improving the business for our customer,” he added. “We are providing better service in store, selling complete solutions, delivering at more convenient times and improving our technical and after sales service. We are well positioned to emerge from the recession with a compelling offer for customers. We remain confident of our medium term target of achieving a three per cent to four per cent return on sales.”
In a forward looking statement DSGi said it expects the "difficult economic backdrop across Europe" to continue throughout the coming year, but said it is well prepared and "continues to focus on managing costs, margins, stock turn and cashflow".
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