Expectations of a big store cull were confounded although, as revealed on Monday by Retail Week Online, there are likely to be significant job losses at the retailer’s head office.
In fact, this morning’s Stock Exchange announcement was anodyne and immediate impressions were that it was pretty thin stuff. But, when he elaborated during his presentation and detailed some of the concrete improvements already under way or planned, Browett impressed.
His turnaround strategy is built entirely upon customers and their changing needs – something that had been insufficiently recognised within the old DSGi worldview, which was over-reliant on a straightforward product and price perspective.
The new shift towards the customer dictates improved product choice, better advice and selling and easier-to-shop stores. The product mix is already changing at the flagship PC World and Currys chains in the UK, which have also begun to be remodelled to cater better for shoppers.
There will be no room for mediocre shops, so about marginal 77 Currys.digital stores will probably go as their leases expire over the next four or five years.
Browett reckons stores remain an asset rather than a liability. Although online sales are likely to rise to 30 per cent of DSGi’s business and that of the electricals retail sector generally, he believes there will always be a place for a good shop (by the way, did you know that 80 per cent of PC World’s prices already match those offered online, indicating that the retailer is unlikely to take a big hit having to lower prices to match online competition?).
Many of the improvement ideas seem to be inspired by DSGi’s Scandinavian Elkjøp division, which Browett highlighted for the quality of staff product knowledge, service and financial performance. A new-model, big-format Currys store will be piloted in time for this year’s Christmas season, based on a shop that has just opened in Norway that generated sales of£2.5 million on its first day of trading.
On the thorny problem of Italy, Browett thought better performance would take time, but apparently, so many basic retail rules have not been observed that simply making UniEuro an average business would hugely improve results.
At present for instance, stock availability is below 70 per cent. And, if it achieved market-average sales densities, UniEuro would deliver up to a 3 per cent return on sales.
Browett’s ideas have much in common with the strategy that Best Buy adopted to get where it is today. Best Buy is of course headed to these shores, but Browett believes building a chain here from scratch will be a big ask and that DSGi already has a strong position on which to build.
If he can make the business fire on all cylinders, he expects to return to EBIT growth next year and targets 4 per cent EBIT in the longer term.
He’s only just beginning. The ambition is there – now we’ll have to wait and see if he can deliver.