Deathwatch: Profit crash for DSGi - down 78%

25 June 2009

Profits at DSGi, parent company of PC World and Currys, have slumped by an alarming 78% in the year leading up to May 2nd. The group made a profit of just £50.5m compared to £225.6m in the previous year.

Chief executive John Browett said: “The difficult economic backdrop across Europe and subsequent impact on consumer spending, particularly on discretionary products, has been well publicised. The group expects these conditions to continue through the coming year in many of its markets.”

But there was better news from DSGi’s reformatted stores where they have reported a gross profit uplift of between 11% and 65% compared to the rest of the chain. The retailer will open 101 reformatted stores in the UK during the year, including four Megastores.

Are you a shopper at one of the Megastores or one of the reformatted shops? Noticed any difference? If you’re a DSGi staff member, maybe you could tell us how staff morale is in the wake of the profit drop.

[Retail Week]

TOPICS:   High Street News   Games   Economy


  • dududu
    Hey, at least they still make a profit. The company I work for will be happy if we can reach break even this year -
  • Bob
    DSGi is still turning a profit unlike many retailers, though. The reformatted stores make more money because they get cherrypicked stock and more staff, whereas the other stores get the clearance shit they can't sell - Which means they can come up with soundbites such as "But there was better news from DSGi’s reformatted stores where they have reported a gross profit uplift of between 11% and 65% compared to the rest of the chain" so that the shareholders don't kill them.
  • MrRobin
    Also, the 'profit' figure does not include 'one off' costs, such as all the money they have spent on restructuring (totalling £190.9 million) Thus actually creating an annual loss of £140.4 million. Lies damn lies and accountants.
  • John C.
    Please note that they may have made a profit but when considered with the massive exceptional cost of about £190 million they ended up making a LOSS of around £140 million. Seriously how do you lose that amount of money? Still have faith in ol' J.Browett do ya? I think the recession is covering up for the imminent death of this beleagured retailer. Bob makes a really good point. If there is better stock at the new stores coupled with more staff of course they are going to outperform the older stores. I wouldn't be surprised if the older stores have been directed to make due with the staff they have even when others leave. This will then allow the company to quote ridiculous uplifts to the city when comparing to the better staffed stores. Small term tinkering can not polish this turd of a company.
  • Robert
    To improve there profit margins, I think they need to start sacking some employees and retraining the remaining ones. Every time I go into Currys or PC World, the staff often outnumber customers. In the new style stores, instead of harassing you this ecessive workforce simply stands around chatting amongst themselves, Until that is you ask them a product question. Then it's silence or err .... I better find someone in that department and finally to make things worse, once you have been introduced to the "product expert", you inevitably know more than them.
  • pete
    morale in the stores? its generally shit in any store that hasnt or isnt going to get a full refit. the levels of target to achieve bonus for sales floor colleagues are ridiculous we're pressured into hitting targets and numbers and bollocked for selling single items like a TV, PC etc with no add ons. but the fives selling model is all about no pressure sales and tailoring to the customer. if that customer has all they want or can afford, we suffer. its classed as a missed opportunity. so theres no pressure to do better and hit the targets while giving the customer exactly the service they need. bullshit. even the company's websites offer things the stores do not, like free delivery on a lot of items.
  • mark
    Crappy, expensive, rude staff, always things out of stock for weeks on end, who'd shop there anyway?
  • John C.
    Respect to MrRobin for beating me to the punch re the massive loss.
  • Namer
    Why even shop in their stores when you can order online for cheaper and free delivery?
  • mac
    There will always be a market for thses guys, as the people that shop there can afford it and they make an afternoon of it at the weekend, these better off folk are safe in the knowledge they have bought a genuine item and can return it if faulty, too many risks online for some people.
  • The B.
    Namer, you don't shop in the Curry's stores, you go in to get an idea of whether the product fits with your requirements and whether it's pretty or not (you can't always tell from online photos) and then you buy it for cheaper online.
  • pete
    the real bob is right. Currys stores are nothing but a showroom now
  • jim
    shock horror article on dsgi
  • Nathan
    The problem that PC World specifically are having is that netbooks are selling a little bit too well. Selling £400-500 laptops and attaching stuff like Norton 360, Office, a bag and other bits and pieces is their bread and butter, but people are increasingly walking out with a low-margin £300 netbook instead. The problem that DSGi has is that their stores offer the same (or worse) proposition as online stores offering the same product. Stores like PC World need to be known as somewhere you go to get expert advice, see the latest tech on display (and powered up for demonstration) and get fantastic, face to face aftersales service/support. These 3 points are things that online stores can't really do, and DSGi needs to capitalize on that to remain relevant to consumers.
  • Seriously...
    It depends completly on which stores you shop at. Some are mis-managed. Stock is filtered down through supply chains in the same way as the big supermarkets - so if a team in a store hasn't counted their stock correctly, they're never replenished. It's a vicious circle, there are colleagues that don't care about their business, so they don't put the effort in, and as such visitors to a lot of branches get the wrong idea - that employees don't care, there isn't any stock, nobody is there to serve you. If you were to go to a different branch, you'd probably get a completely different idea!
  • currysbod
    This article is, of course, the sister article to one reporting Kesa Electricals (aka Comet) pre tax loss of £81.8 million and Comet sales down 76.5%. Oh...
  • dora
    In response to currysbod........... but you guys made a loss of £140 million lol. Also we know how youre not allowed to discount as much anymore, whilst comet actually are as theyre losses are not as much as yours. See you in the jobcentres!
  • go_rators
    Couldn't agree more Pete, DSG stores in general have moved away from customer service and training colleagues in favour of pushing people out onto the sales floor to ultimately lie to get high-margin products on low-margin PCs and Laptops. It's all they care about any more, but unfortunately that's not going to keep people coming back, people leave our store every day and go to Currys up the road because there they don't tell you they won't sell you a laptop unless you buy something else to make it worth their while. The new bonus scheme isn't a surprise either, I had people doubling their monthly salary in bonus under the previous scheme - it was too easy. The current system means everybody as a team needs to work at full capacity, and if you don't, micromanagement, 6 weeks fast-track, and you're out. I also agree with Mac, a daily target can be made in one sale to a particular customer. Having said that, the people left trusting DSG stores for advice and service are now few and far between. Can't say I blame them, we have appalling store morale and nobody has real motivation or satisfaction, who enjoys going to work like that? And who ultimately sells well in that environment?
  • Jack
    Profit?!?!?!?!?!?!? Good on 'em. I did get a printer from them instore the other day, they do have some good deals
  • Ex. s.
    Will improve aftersale service with faster turn around of customer products in their TV repair dept. ? What ? How exactly ? Without qualified TV engineers ? Without workshops ? and a wast of time not very "local hub" joke of a scheme. There is a complete lack of any proper technical training for current crop of van driver CSR,s ( customer service representative ) who are presentling going around virtually vandalising Plasma & LCD TV,s by blindly replacing every single Pcb boarb in these untill they find one that cures the problem or not. When not, they will reorder the entire inards again, some other bod will come back and fit say a week later, this will go on if the parts dont fix untill the 28 day limit, when the customer can, if they are aware, claim for a replacement product. They have no workshops, save for one centralised & overrun national repair centre which just cannot cope with the volume of repairs, no proper technical back up, no senior engineers with years of experience in TV repairs, and no hope i,m afraid. I cannot see them investing in and recruiting suitably qualified field staff with which to rescue The Techguys service provision for flatpanel TV repairs. They will probably just stick to PC repairs & upgrades themselves and further expand the TV repairs to third party contractors who, operating individually, cannot provide Dsgi customers with a consistantly good and reliable repair service as should be expected of customers of a large international company that likes to blow its own trumpets when it suites.
  • smicker
    Lets just look at it this way, if the city have confidence then thats the main thing, not some arseholes on Bitter boys are us. Onwards and upwards, cheap shears @ 14P easy.
  • Annoymous C.
    The store I used to work in now just seems to be bullying it's staff nonstop. If you go to a DSGi store and get poor service or are trying to be sold stuff you don't want, don't blame the staff, they are all in fear of losing there jobs. This is sugar coated by the management as "Providing great customer service" what that means in there language is selling you lots of shit you don't need. I'm noticing a lot of colleagues also getting into disciplinary action over the smallest of things. Almost like management are trying to pick people off.
  • Anon W.
    Staff morale is low low low, who is to blame? Everyone blames their higher-ups. I was bollocked the other day for not using 'Fives' the robotic selling model. I tried to argue back by using one of the companies older slogans 'People buy from people' but this was thrown back in my face by them saying I should incorporate my own personality into the Fives script. How? I'm being told exactly what to say and how I should say it. I blame fives, the removal of a decent bonus structure and manager nastiness for low staff morale. We get paid the same as folk at ASDA but are expected to harass innocent laptop buyers. Oh and in the Chief execs latest 'speech' he has declared how staff shouldn't walk away from 'Dry/Flat' deals, without stopping to think that perhaps the staff that do this are in fear of a huge bollocking, or even losing their job. Their is a new fast track system in place to get staff out in 4 weeks if they don't meet targets. and then they question why morale is low. I've worked for Pcw for almost 3 years, part time (college as well) and I adore (most of) my colleagues, which is the sole reason I don't want to leave, but I fear soon I might have to.
  • Colin D.
    Of course DSGi is doing badly, the senior management team are all a bunch of idiots. They haven't got the balls to make proper decisions. Why would they ? They worked their way into their positions of power by brown-nosing.
  • who k.
    The answer for DSGi - Provide great customer service!!! How - 3KPI's - Margin @18% NET (after costs), Store Standards & Stock Loss Enough! Result - Outstanding Customer Service, Repeat Custom, Job Safe. Done.
  • Elsie
    i wish someone would put this poor dying company out of its misery. After the rights issue its share price hard slumped again.
  • A c.
    PLEASE PLEASE understand that all companies are there to make a profit, there are very few not for profit companies out there, the fives selling model is there to understand individual customer needs and the use natural human signals to help customers trust the colleague and to enable the customer to really tell you what they want, we have all seen customers who need help when asked if they need help they say no, why because this is a preprogrammed response and questions like this do not help the customer tell us or the colleague to tell the customer how to get the best out of their product, NOW the real issue is that if all colleagues talked to all customers all the time to find their unique requirements then the customers would get what they want, the company would get their profit and the colleague would receive a bonus, now the problem is the colleagues who are paid to do this and are engaged to do this CHOOSE not to and you should only receive challenging questions when colleagues lie about their interactions with customers or do not want to serve customer well, I am sorry if this offends but this is the truth instead of focusing on why others are making your life hard, you should focus on yourself to improve service to the collective angry customers and do your jobs properly, however if this request is to hard for you or you can not sell like all of the sales companies out there you could always leave and find a NON sales job.
  • Spunky
    All I can say, is that I was one of the AM's that was made redundant. At the time it was shock, horror, what am I going to do. Now, I am really glad it happened. The AM's that I speak too are now doing 60+ hours a week, having to do the work of 2 people and are on the same money and low morale. Honestly, I wish DSGi all the best (as I have 9625 shares in them!!!!). But soooo glad I am out of it.
  • Lost b.
    I was disgusted that within a week after the redundancies the company was promoting the stepping into management program and also offering to pay staff around £1500 if they could find a manager. As for disiplinary action you only have to breathe to get action taken against you. The GM must get some sort of incentive to get rid of staff without having to make staff redundant. The FIVES model is absolute rubbish as was MILESTONES, i feel that when i buy from them which is rare i'm pounced on by the staff eagerly trying to get a sale. If i do buy something i try to find the same member of staff i've known for a while who actually does assist me in a way i like. Every time I walk into my local store, the greeter always says something along the lines of "what brings you to pc world today", I normally reply "my car". I find this annoying as all i want to do is go in and buy what i want. I can't blame the poor staff who HAVE to do this, otherwise putting their jobs on the line. As for A motivated collegue, you've obviously been brainwashed by the company, you're either a gm on a bloody good salary or have your head firmly wedged up your gm's backside, endlessly supplying cups of coffee all day!
  • DSGi B.
    [...] DSGi stopped turning over their own businesses, closed their staff blog to prying eyes and waving goodbye to senior members of staff, we [...]
  • the v.
    well i personally was on the end of disciplinary action, watch your backs !!!!! i got fired for having a thought ! oh yes a thought. i asked if it would be ok to do a bit of side work and was told as long as it dont conflict with work it should be ok. 1 week later i was sacked. no business was running or had even been set up, no work outside of work had been taken on. i was just thinking about it. apparently in my contract im not allowed to do that. ho hum. nearly 10 years of service wiped out for thinking about my future..... As for FIVES... well. we are told its used to explore the customer and find their needs. if they just want a laptop and thats all their need is, they cant have it. you must ( and there is a sheet of overcoming objectives ) ask why they dont want anything by saying ' now you mention it... ( bullshit answer here) and thats why you need it'. if they dont want anything you have to leave them and make excuse and go and see manager, prolly about 2 maybe 3 times with different deals temting them into taking the attachments. Also the company falsify records to give the figures they need, like when you sell a laptop and norton its an attachment, if the laptop becomes faulty, when you do the exchange, you have to refund the norton as well and resell it with new package so they maintain the all the figures are 'massaged' i'm not bitter before you start judging me, i'm glad it happened and was lucky enough to have walked straight into another job (which is better paid and better conditions). hats off to the staff who are still stuck there and cant get out, my thoughts are with them. when the company shafts you everyday, takes away your bonus and expects more from you, makes it kinda hard to be extra 'nice' to moaning customers.....
  • Wise_people_avoid_DSGi
    I worked at PC world and at one time it was a good company for the most part. But customer service was always hit and miss from store to store. But with no REAL bonuses and staff talked to like shit and treated like shit by management customer service is not an issue, only avoiding the jobcentre and swallowing more shit is the day to day task for staff and so naturally morel is zero in most stores! The Government should force the DSGi group to treat DSGi staff like humans again and not like animals!
  • Anonymous
    I work at PC World and the reason that profit is heading up in the WNR stores is because the big bosses say that WNR stores must perform. Therefore, pressure is high, and customer service falls through the floor. KPIs are driven into customers from the moment they enter to the moment they leave, and they are pressurized into spending money they don't need to. That explains your profit margin, DSGi.
  • i w.
    When i applied to PC world i thought it would be great, its like a toy store for adults! i have such great knowledge of electronics, and i thought it would be great working with others, and passing on my knowledge to the customers. well what can i say? as an employee for world, i hate it! I have only been there for 4 weeks, and the twats pummel the fives training into 2 days. and you have to ask these damn ridiculous questions each and every time. you cant just approach a customer naturally, and be helpful, you always have to use fives. i hate everything about fives, i can imagine it pisses customers right off! you have to be seen to approach each and every customer, but the thing is, you don't know how many of your colleagues have done that already, so by the time i approach them, they are ticked off! i don't use fives all the time, i analyze the person i am approaching and speak to them in a manner that they will appreciate. but the FUCKING managers are a bunch of twats! in their eyes if we haven't sold the shitty bags, accessories and especially. insurance (whatever happens). In my interview i was told there was no pressure selling, what a load of BOLLOCKS! I treat all customers exactly the way i would want to be treated, with respect and courtesy. if they come in with a PC problem, i will try and resolve it without selling anything, unless they need it, they are greatful! back to the awful management team, The fucking managers are like flies on shit, on your case all the time and say stupid comments and insults that irritate the hell out of me, its not making the situation better but worse!!! the dumb fucks have no product knowledge, and are just too retarded to work there! Training, what training? they get you to look at cool on the intra-net for about 30 Min's, familiarize yourself and thats it! no details of company policy, operating procedures, training on what the terms and conditions are when selling insurance products (as this is a legal requirement), you are expected to perform the same as a seasoned employee, and just thrown into the deep end! I was selling shit i didnt know about, especially the services and whatever happens. I cant wait for January 2010, I'm going to leave!!! SORRY ABOUT MY LANGUAGE, AS THAT PLACE JUST TICKS ME OFF!!!
  • John G.
    The morale in most stores is pretty low, shockingly poor sometimes. Something that has already been outlined is that they need to excel at customer service in order to compete with the web. This would work, look at john lewis for example, people will happily pay £350 for a television they can get elsewhere for £300, just becuase the staff are "nice" in john lewis. The problem lies in the laughable wages offered. The saying "pay peanuts, you get monkeys." applies to a certain extent. So now I have just classed myself as a monkey allow me to explain. As a student, working part time, I am probably not the type of worker you would be looking to empoy if you truly wanted to provide distinguishable service. Not to say I dont care, it is just a dedicated professional would do a better job. The dsgi employment model is pay crap wages, and milk the employees dry. The average sales staff lasts for about 4 months in my store. Good staff may be hard to find, but the real issue is that they dont even want good staff. Pretty short term thinking in my opinion. And by the way, Advent, Matsui, Logik, Carlton are all currys own brand and are complete shit. We call matsui shitsui. Avoid these products like the plague, the average fail rate for the matsui 19/22 dvdb19 was completly disgusting and to be honest should not have been sold. And yes, that was a fake name I used, but you know who you are...

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