Dixons’ update today revealed a sharp, if understandable, polarisation of performance across international markets.
Normal climates were reversed. In balmy southern Europe the sales barometer was icy. In northern regions, revenues were hot.
In the most troubled Eurozone countries however, such as Greece and Italy, sales are below zero.
Dixons’ new group boss Sebastian James remains committed to Europe’s Mediterranean shores, in the hope that despite the cruel scirocco that’s sandblasting retail sales, the retailer will benefit in the long term.
He paid tribute to Dixons’ Greek division, Kotsovolos. “I’m very proud of what the Greek team has done to keep the business just shy of EBITDA neutral,” he said.
As Greece descended into political and economic chaos, he noted, Kotsovolos aggressively managed costs, built market share and clocicked with shoppers to the extent that they are willing to spend.
In less troubled though still shaky Italy, it was a similar story as Dixons’ group strengths enabled it to trade through troubled times while smaller retailers struggled.
Dixons’ northern European operations allow it to brave the vicissitudes of the South’s travails. Although there was disruption in some Scandinavian markets from the collapse of rivals – presumably a result of closing down Sales – Dixons expects group profits to come in at the top end of City expectations at between £65m and £70m.
There were like-for-like advances of 8% in the UK and Ireland and 7% in the Nordics and central Europe in the 16 weeks to April 16. In the core UK market Dixons is also benefiting from the problems of rivals such as Comet, which is a turnaround case, or Best Buy, which decided to shutter its UK stores.
But Dixons is also making its own luck by improving stores and making service a differentiator as consumers seek to navigate an increasingly complex technological world.
The retailer cannot afford to sit on its laurels – and James insists he intends to make it better every day – but it is starting from a much more powerful position than rivals.
That’s testament to the extent of change initiated by James, previous chief executive John Browett and UK boss Katie Bickerstaffe who pioneered the service offer.
The City seems confident in how Dixons in shaping up. Investec’s David Jeary said: “Dixons is set to be a long-term winner in our view.”
The UK looks as if it on track. If Frau Merkel and Msr Hollande could establish some confidence in the Eurozone economy, Dixons should surely be a winner across the continent.