Dixons Retail, the owner of the Currys and PC World brands, reported that sales for the group had fallen 2 per cent for the year to April 30. However, chief executive John Browett confirmed that underlying group profit would be approximately £85 million (Dh505.45 million) for the year when preliminary results are released on June 23, putting pay to analyst speculation of a further profit warning.
The company did not release any actual figures but said like-for-like sales for the group’s UK and Ireland businesses were down 3 per cent for the year and total online sales were down 5 per cent on the same basis.
Dixons, which announced the closure of its Spanish PC City division only last month, said it had made £50 million worth of cost savings over the year and that customers had responded well to the shift away from smaller high street-based stores towards a larger megastore format of selling.
Katharine Wynne, retail analyst at Investec, forecasts a like-for-like sales decline of up to 7 per cent in the first half of the next financial year. This is due to the anniversary of the World Cup, which will provide tough comparative figures for TV sales which make up around 20 per cent of Dixons’ sales.
Meanwhile, Kesa reported a 15 per cent drop in sales at its Comet chain and expects the UK retail market to be tougher than Spain in the year ahead. Updating the market in advance of its full-year results in June, the group announced a restructuring programme for its UK and Spanish businesses designed to generate cost savings of €18 million a year.
The closure of six stores in Spain and a consolidation of Comet’s UK network of service centres and distribution depots will generate exceptional costs of €33 million.
However, Kesa said it expected adjusted profits for the year to April 30 to be “in line” with average market expectations of €92 million emphasising the comparative strength of its core French business, which trades as Darty. “We see the UK market as remaining the toughest in Europe in the year to come,” said Thierry Falque-Pierrotin, chief executive. He added that the retailer was budgeting for further like-for-like sales declines in the UK, Spain and France.
Comet’s like-for-like sales plunged 15.2 per cent in the fourth quarter, and sales at the retailer’s Spanish, Italian and Turkish stores dropped 14.9 per cent.