PC World and Currys troubled by falling profits
The mainstream electricals market has taken a sound beating over the past twelve months. Best Buy's aggressive expansion in the UK has been anything but, with the US brand pulling out of key retail sites; Comet recently announced extensive job losses and regional chains have also been victim to poor trading conditions.
And the trouble goes all the way to the top; Dixons have today issued a profit warning after sales at British and Irish stores open over a 12 months fell 11 percent in the 11 weeks to March 26. The operators of PC World and Currys were expecting annual pre-tax profits of around £105 million by the end of April, but now believe that figure will drop to £85 million.
What to do? Well, it's likely Dixons will pull out of key European markets such as Spain, and they're also aiming to cut annual costs by £50 million for the next three years, extending a previous two year target.
It'd be easy to pick at Dixon's failure to turn fortunes around, especially since their revival plan appeared to pare back customer support to the bone, but it's clear that the high street (and retail parks) are struggling in the wake of a recession and government frugality.
Better brush up on those FIVEs, lads.