Dixons is to scale back Pixmania business making job cuts and closing stores

The electricals specialist, which gained full control of the Pixmania business in August, has begun a consultation process to slim down the French business.

Pixmania employs 1,400 people across two offices in France and the Czech Republic and operates in 29 countries. Chief executive Seb James has kicked off a process to withdraw Pixmania from 17 countries although he warned it“will take time.”

Pixmania made a £17.1m loss in the first half when its like-for-likes fell 7%. James said: “In the quest for revenue growth Pixmania expanded into huge numbers of countries and categories such as jewellery and beds, which it was not known for. It also opened some shops which we will look to close.”

Dixons acquired 77% of Pixmania in 2006 for £185m.

In the UK, James said “pleased” that the retailer’s domestic business - mainly Currys and PC World - made a first-half profit for the first time in five years and he said performance had not been hit by Comet’s clearance Sale.

James said: “Comet is in administration. We expect that the physical iteration of the brand will disappear in the next few weeks.

“Comet is going through a liquidation fire Sale and the administrators have added some stock to that Sale, like bikes and towels.

“It is very hard for us to predict the impact but it does not seem to be too bad at the moment.”

He also criticised Comet’s strategy in dealing with the arrival of online retail. “We reacted very, very aggressively to this existential shift in the market,” he said. “We recognised that the only way we could compete was to unlock the value of our stores and focus on service. Comet were ahead of us but they did not pursue that route. They were at a disadvantage in that they were the number three retailer and did not react.”

James said that after OpCapita’s acquisition of Comet for £2 last year the retailer did not “have enough capital behind it” to turn the business around.

Meanwhile, Dixons has introduced a new service product to its stores. Showhow, a development from its Knowhow service business, allows shoppers to buy 30 minute tutorials for new products and provides more in-depth training than normal shopfloor service.

Knowhow, introduced in the UK 18 months ago, has been rolled out to stores in Italy as well as a trial in Denmark.