Deathwatch - Another Casualty As DSGI Sales Plummet

15 January 2009

As widely expected, DSGI have revealed some agonising Christmas sales figures, with Currys head Peter Keenan heading out of the door.

DSGI announced that like-for-like sales (which ignore new store openings) had dropped 10% in the three-month period leading up to January 10th.

Keenan, who has joined HSBC, follows TechGuys chief Tom Barry through the exit door as DSGI look to restructure under chief executive John Browett with the economic downturn hitting them hard.

DSGI told us, “This is an exciting new role for Peter in a new direction for him and we wish him well. His departure coincides with the announcement of a new structure which is better aligned to the company's Renewal and Transformation plan and which suits John (Browett)'s hands-on management style better."

Hands-on eh? A fiver to the first reader who can send us a snap of Browett flogging Norton Antivirus to a PC World customer.

Bad news too for the Home Retail Group, owners of Argos and Homebase. They have announced that Argos sales dropped 7.5% in the 18 weeks up until January 3rd, while DIY chain Homebase saw like-for-like sales in the same period drop 10.2%.

More high street doom and gloom as we get it…

TOPICS:   High Street News   Games

31 comments

  • Jakg
    Like-For-Like sales have been down for ages - 10% down isn't "plummeting" especially considering people consider themselves poorer and thus spend less. John Browett does actually sell occasionally when he visits stores btw :P Sensationalist journalism strikes again..
  • Ian D.
    I bet HSBC can't wait to follow the good habits expounded by Currys........
  • andy y.
    jakg either you are paid dsgi propaganda merchant, or the reNeducation worked a treat 10% down is disaster when your margins are wafer thin. dsgi is a volume business and declines like this in critical mass are near fatal. the point will come where stores are struggling to cover fixed costs from gross margins.at that point you are totally screwed
  • Mark M.
    When will the media take some responsibility for the downturn? Every other story is about recession, credit crunch etc which in turn, feeds the fear in the economy. I'm really fed up of reading/watching/hearing the same doom & gloom
  • Jakg
    DSGi propaganda machine? 10% down on volume (not on profit etc) is what the company (and other companies) have been at. The media are making everyone thing that everyone is now ultra poor and so they aren't spending as much as they used to...
  • Currysbod
    "Plummetting" can only really be used when like for like sales were significantly higher. The 10% downturn on sales is consistant and tbh, not that far removed from the rest of the marketplace and aggrevated by the increased sale of LSTV and PC's which are being very agressivly marketed and do have small profit margins. Iirc, the last trading statement detailed L4L sales down 7%. It should be noted that DSGi have a £400 million credit line which is currently unused and the 60 odd stores that have been refurbished are trading UP about 15%. So, NOT all doom and gloom.
  • Colin
    Well said Mark Minghella i agree 100% with you.
  • Jakg
    The newer stores aren't trading much better, and when they are it's usually because they've had the shit they can't sell sent to the older stores. The newer stores also have a lot more staff, so a 15% improvement is actually quite poor imo...
  • Kevin
    Credit line = overdraft Didn't help any of the other companies who had huge overdrafts did it. They had hundreds of millions in credit as well. But overdrafts can be called in at any time. You can't get suppliers insurance for DSG, why not? What problems are the insurance industry not telling us about if everything is fine?
  • andy y.
    Spot on kevin.The credit line has not been withdrawn by the banks so as to give comfort to suppliers.The banks know if they pulled it that woudl put at risk other loans to DSGI.Howver if DSGI had to draw on the line that is a indicator of distress and they would pull it.At that point the company goes into a financial spiral. They then go in admistration and like Woolies and Zavvi the staff are fed lies about Tesco's buying them out to keep then working through the locust sale.
  • slackrat77
    DSGI have cash and virtually no debts to speak of. they are operating within their means and continue to do so. the administrators are only called in when a company cannot pay off their debts. like it or not, DSGI will be around in the UK either through Currys, PC world or the combined superstore that just opened last year, for a long time. Sorry....
  • Kevin
    I don't think they'll go anywhere either but if there is no supplier insurance they have to pay cash for their stock, that will certainly put a dent in their bottom line if they are having to use cash rather than short-term credit. slackrat77, why can't the DSG's suppliers get insurance to cover themselves? Any ideas? If they are absolutely fine why are they shedding jobs especially with Techguys who they need to fulfil their existing warantees and contracts? Something somewhere is going on. I can't imagine it's enough to cause major 'company collapsing' issues but it's not all rosey for them is it.
  • me
    Its not that DSG and DSG alone have an insurance problem, if you read a bit of fact, try reuters.co.uk, you'll find that there is no problem with DSG's liability its the insurance folks playing silly buggers, because there's such a slow down in high ticket luxury items at the mo the insurance providers have decided to exclude them from the cover that has stood for many decades, insurance greed - somebody might actually make a claim. there are many retailers affected, lots of shops who would want cover to buy things that fall under that umbrella - laptops, tv, camera, camcorders etc etc those who choose one of about 3 major insurance companys. Not as headline grabbing as DSG can't get insurance to buy stock tho.
  • oliverreed
    Homebase isn't competive compared to Focus (which still isn't cheap) and definately Wilkos. Not really a shame if it went
  • aine f.
    arent some/all of these companies gaining in pricing because the original selling price they have to legally quote had higher vat, so now the sale/reduced price seem better than they are, because they have lower vat prices included? i now wonder how much i am really saving or not. or am i wrong? find this all very confusing now.
  • Doomy
    oh yeah, imagine that.... if its like 10% off, it will be actually 8.5% off? we are being riped!
  • antsgame
    Why do BitterWallet say Deathwatch about DSGi? Does DSGi even know anything about the company? also does everyone always belive what the news tells you!? Its a load of Bull... Yes maybe sales are down but Do you know how big a company DSGi Is? BitterWallet... Please Recheck your pubication, the word "Deathwatch" is irrelevant remark that is based on YOUR personal remark please check your statements about the Group.
  • Al
    I thought I'd give some raw facts on the state of DSGi for the people who seem to think it's still in a healthy position. The profits after tax go like this: 2005: £243 million 2006: £211 million 2007: £2.5 million 2008: -£260 million If DSGi have had a worse year than 2008 (the 2008 figure is until April 2008 ... before the credit crunch really hit), then they've lost more than the £260 million they lost last year. I don't work in the financial industry, but even I'd be worried about lending to someone who'd lost more that £500 million in the last two years ...
  • slackrat77
    asked my boss at work (CurrysDigital) about us not being able to buy stock because of insurance companies as posted by 'me', above. not true. DSGi are not having any trouble buying stock at all. all stock is automatically paid for in 90 days through an automated system. we have no real 'new' lines of stock coming in at the moment that wouldnt have already been paid for. everything is really just back orders for TVs etc. repeat orders Unless the poster can provide evidence of this to the contrary.
  • Tom B.
    Q: Why have some of the directors jump the Dixons ship ???
  • DSGI e.
    tom they were pushed. a lot of hatches are being tightened down not through last ditch attempts but in preparation for the long haul. the company alone has 1.2 billions pounds worth of stock which is paid for. and no debts worth speaking of, the 400m they have available might be drawn upon before the end of recession but 400 m is only 0.0003% of the stock, in reality the worry is not huge, the loan is an overdraft arrangement to tide over it will be enough to get through to the other side of recession when it can be happily paid off when spending increases again
  • Tom C.
    Not sure how DSGI employee has calculated the percentages but I get the sentiment. Trouble is that holding that much stock which people dont wont to buy is a problem. A 10% drop may not be a "plummet" but is certainly not good reading even if the likes of Argos and Comet are also having poor sales. Peter Keenan is a sound bloke but I am not surprised given Browett having to mix things up that he is moving on. Trouble is, these moves wont change the fact the electronics market is highly tangible and price sensitive and DSGi in recent years has done very little to change or adapt compared to either the online players, food retailers or the likes of Carphone / Best buy. Curry's is tired and who ever came up with "Tech Guys", come on... If you walk into a store there are 20 odd laptops of varying price points but little else to differentiate them and mr & mrs average don't understand the differences or to some extent the brand value of toshiba v acer so buy nothing etc. Big ticket items like TV's are changing, so much stock will require reductions to get rid of them. Personally DSGi may well get through the "long haul" but not without significantly more changes and greater savings than ones announced so far. Get rid of some of the brands and consolidate some of the out of town sheds and they may be ok, but I wouldn't invest.
  • DSGI e.
    yeah fair point i know my mistake the answer should have been 0.3% but still not too bad. there are a lot of changes being made, and even more being discussed even at store level so i daren't think how much is happening at the top end. this amount of stock does shift, the company generally has somewhere between 6 and 12 week turn around on most stock lines and has done for years, even with the spoken of drop in sales at 10% should therefore extend this time frame by 10% keeping stock in flow for a week or so longer isnt a major disaster its not months and months, the stock isn't obsolete before its sold (though admittedly this did happen with HDDVD products but we had little choice but to invest in both or get left behind as the market moved, only a small drop in a big ocean thankfully.) the money from the stock is then working capital immediately reinvested into more stock yes the stock value is large but it does shift quickly across the total almost 800 stores in UK and others abroad so given the scale of the organization it doesn't cause an issue
  • bob h.
    Have you tried to buy anything from yhe PCworld online shop? - about 75% of the items are unavailable
  • Tom C.
    Yes and i agree, however, I would not be surprised if it were PCworld that made the money this year rather than Currys etc. Also the online market is really tough. The links with pixmania should have allowed the uk dsg sites to pick up on some better process and technology although I am not sure this has happened. I still hate the fact that dixons.co.uk is so full of banner adverts encouraging you to leave the site as soon as you have visited, as well as all the other business areas that they appear to be offering such as Dixons Wine, DVD rental through Love Film, Price Comparison with www.comparemoreatdixons.co.uk. Its what I would call "pimping the brand". I have just had a look and the home page is showing adds for, the RAC, Best Western Hotels, Lighter Life.com, x2, American Airlines, and Credit Expert. The word "Sale" is used 12 times. It is just so busy it hurts. Add to this the inevitable push by Carphone and Best Buy specifically who I notice are recruiting the likes of a "Customer Insight Manager", "Online Content Speciast" and importantly a "Head of Online Marketing". It does not take a genius to work out that they (through recruitment agencies) are likely to approach key staff in DSG and others such as Comet to assist their entry to what is a tough market. With the online electrical market in the uk so fierce, the entry of best buy into retail sheds and an online presence (bestbuy.co.uk - registered but not up yet) I would expect to see things getting even harder.
  • Tom C.
    Have just noticed that Empire Direct have gone into administration, the article blames lost of credit insurance buck in October and the subsequent fall in stock levels very similar to Woolworths. Have just seen another article on no cliams discount .co.uk that DSGi and JJB have had their credit insurance cancelled as well.
  • Best B.
    [...] reader, Tom Chapman, tipped us off in the DSGi sales blog comments that Best Buy is now hiring for UK senior staff. A quick browse through Totaljobs [...]
  • techguy
    Tom Barrie was most definitely pushed, after he had finished with Techguys it is in a complete shambles. Over 60% of the engineers took the redundancy offer and now after Toms "restructure" nearly 50% of the remaining engineers are contractors with little or no experience being sent out to repair customers computers and televisions with very little success and at great personal risk to themselves (cue the lawsuits). Nationally the copmpany has a frighteningly large number of jobs that ths staff just cannot get to in time so the fools at the top who werent axed are going round begging the remaining engineers to work 6 day weeks to try and recover from this total mess they helped to create. I give Techguys as a brand no more than 6 months before they go back to their original structure if they manage to survive this at all. Interestingly Mr Barrie did the same thing with Comet and it didnt work there either so I guess the DSG board have a little explaining to do when the shareholders realise that currys and pc world's service proposition (promised to paying customers) isnt being honored in most of the country.
  • PC B.
    [...] we’ve published stories concerning tumbling share prices, staffing issues, shock management departures, store mergers, sales techniques or redundancies, you’ve been keen to share your point of [...]
  • hamdull
    Well wot i can say is that its not good at all
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