Electricals rivals Kesa and DSGi both post full-year results next week. There hasn’t been much spark in either lately. But as Best Buy limbers up to take on the European incumbents next year, there are signs that the pair are getting into shape.

Electricals rivals Kesa and DSGi both post full-year results next week. There hasn’t been much spark in either lately. Kesa’s Spanish business is soggy as a plate of paella, while its Comet chain in the UK was down 7.3 per cent like-for-like at the time of its last update in May.

DSGi’s sales have short-circuited and were down 11 per cent at group level in the second half to April 18.

But as Best Buy limbers up to take on the European incumbents next year, there are signs that the pair are getting into shape.

DSGi is most interesting because it’s the biggest and faces the most problems. The retailer has already pulled off a £310.6m share placing and rights issue that helped to secure its financial position and provided cash to push on with chief executive John Browett’s renewal and transformation plan.

Investors - especially during tough times such as these - aren’t typically given to throwing good money after bad. As DSGi’s sales line has fallen, debt has
risen. While margins are up, there is to be no dividend this year.

So mixed news, all in all. But crucially - and what is helping sustain faith in DSGi - is the improved performance delivered by revamped stores. These are achieving gross profit uplifts of between 11 and 65 per cent.

This shows that there is life in DSGi yet and has encouraged investors not to throw the stock out with their old video recorder. Investors were also impressed by the quality of Browett’s grasp of the business, its prospects and problems, and therefore more willing to back him as he pushes on to convert more stores, improve operations and service, and build multichannel operations.

Browett still has a year or so before Best Buy’s presence becomes concrete rather than prospective.

It’s not a lot of time, but he now has more resources to make the most of it. The lights aren’t all on yet at DSGi, but it looks as if someone is at home.

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