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Last-minute rush saves day for DSG.

Byline: By Joanna Geary Business Staff

A last minute rush for laptops and flat screen televisions helped to rescue sales for electricals retailer DSG International over the Christmas trading period.

The group reported like-for-like sales growth of eight per cent for its high street store chain Currys.digital in the three weeks to January 13, which offset poor early Christmas trading.

DSG posted three per cent like-for-like sales growth in the eight weeks to January 6 in its computing division - which includes PC World - while the UK and Ireland electricals arm saw like-for-like growth of one per cent.

Total international sales grew by three per cent on a like-for-like basis during the period, with the strong performance of Scandinavian business Elkjop and Greek business Kotsovolos being partially offset by the continuing weakness of Italian business UniEuro.

Like-for-like sales at Elkjop increased by 11 per cent, while same store sales at UniEuro dropped by seven per cent.

DSG chief executive John Clare highlighted the strong performance in the Nordic countries, Ireland, Greece, central Europe and Spain, but said Italy and PC City in France "remained disappointing".

However, Mr Clare said there were some "very early" signs of an improving performance in Italy, while winter sales only began in France on January 10.

DSG said excluding Italy, underlying operating profits increased by 30 per cent.

The group, which last April took Dixons off the High Street as an online operation and rebranded its stores Currys.digital, reported like-for-like gross margins down by 0.7 per cent in the eight weeks to January 6.

DSG said laptops and flat screen television sales were strong over Christmas, but added sales at Currys in the run-up to Christmas were "disappointing".

The Christmas trading news came as the group also announced a drop in half-year profits, which slid 25 per cent to pounds 78.9 million in the 28 weeks to November 11, 2006.

DSG said its online operations accounted for 10 per cent of the Christmas sales season, up from three per cent last year.

The Dixons.co.uk brand "exceeded expectations", while DSG said online sales for PC World and Currys.digital were also strong.

Mr Clare said profit margins were in line for a boost with the imminent arrival of Windows' new operating system Vista, which requires higher specification laptop and PCs.

He said the launch presented a "significant opportunity for the first time in a long while to arrest price deflation in the PC and laptop market". DSG has put its international expansion plans on hold in the short term to focus on bringing the Italian operations up to strength.

It still hopes to open stores across Europe later in the year with the potential for 1,600 new jobs.

The group shut 28 High Street outlets across the UK in the first half of its financial year as part of its Currys.digital rebrand, although five new stores were also opened.

joanna_geary@mrn.co.uk
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Jan 18, 2007
Words:495
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