Electrical retailer DSG International today revealed it has been hit by a “significant” fraud at its Fotovista warehouse in Paris.
The Dixons and Currys group warned that the fraud will wipe out profits of its new businesses division this year. Analysts had expected the new operations to make a contribution of around £8m.
Several warehouse operatives and external individuals have been arrested by the French police and the investigation is continuing.
Paris-based Fotovista, which DSG bought for £185m last year, owns Pixmania, the online retailer of digital photographic and other consumer electrical products.
DSG said in a statement: “Management has reacted promptly to this isolated incident, and is confident that the immediate issues have been resolved.
“Appropriate control procedures are being deployed to prevent recurrence.”
A spokesman for the group declined to give any further details.
DSG also announced today the sale of part of the Fotovista business, Primaphot and Maine Color, for €22.4m (£15.2m).
Fiona Walsh, business editor
Thursday March 29, 2007
Guardian Unlimited