DSG International chief executive John Browett has unveiled a five-point plan that he claims will transform the embattled electricals giant.
The plan involves new formats for the retailer’s PC World, Currys and Currys.digital stores in the UK. About 80 of the high street Currys.digital stores are to close as their leases expire, while those that remain are to be refocused on portable technology. 10 per cent of PC World stores are to be refitted to a new format by Christmas.
DSGi plans£50 million cost savings in the 2008/2009 financial year, with further savings to follow. The focus of the cuts will be its head office – as revealed on Retail-week.com earlier this week – and supply chain. The savings will be reinvested back into stores.
The retailer is also to rationalise its businesses to focus on the UK, Ireland, the Nordics, Greece and the internet. It is non-committal on the future of its struggling Italian operation, saying it “needs a significant turnaround”, while all other parts of the business, including central Europe and Spain, will be the subject of a strategic review.
DSGi anticipates that the internet will come to represent about 30 per cent of the electricals market over the next few years and plans to roll out the operating platform of its pureplay e-tail operation PIXmania across the group.
The retailer plans to improve its offer to the customer by bolstering “good, better, best” ranges, enhancing customer service and the range of after-sales services available to customers and making stores easier to navigate and more interactive.
“DSGi has not kept pace with its core customer needs, particularly in the UK,” said Browett. “We have developed radical and detailed plans that will transform the very DNA of our business over the next three years.”
The review was accompanied by a trading statement, which showed that like-for-like performance slipped in the second half. Comparable group sales were down 1 per cent, compared with a 1 per cent rise in the first half, with PC World suffering a 9 per cent decline in the second-half. UK electricals were flat and Italy was down 13 per cent on a like-for-like basis.
Overall group sales were up 8 per cent for both the half and the year, with the DSGi’s e-commerce division showing growth of 28 per cent in the second half.