DSGi death watch? 52-week stock low, US competition, Electroworld sale rumours

16 November 2008

Is DSGi on its last legs or on the cusp of a strategic re-organisation that could pull the business back together? The last year has not been kind to the group which includes top UK brands Currys, PC World and Dixons as its stock price has plummeted down from a 52-week high of 122.50p to a meager 18p during trading on Thursday.

Online, DSGi deserves credit for rolling out early and focusing resources on building their internet sales but their pricing has failed to keep up with hungry competitors like Play.com and Amazon. The imminent arrival of two big foreign players, CDiscounts (part of Casino group from France) and Best Buy (the giant American retailer) does not bode well for any remaining market share DSGi is clinging on to.

The Sunday Times reported last week that DSGi had hired Polish corp finance firm, Saski Partners, to sell off it's long-suffering Electoworld division. The Register subsequently reported that DSGi denied this. The Electroworld brand operates in Czech Republic, Greece, Hungary, Poland and Turkey. DSGi is also under pressure to sell its Italian UniEuro branches which have been consistently under-performing.

We're not big business analysts here at Bitterwallet but we know a sick pup when we see it. The problem in the UK is that DSGi has been too reliant on its high street presence and dominant branding to keep market share coasting over the past decade. The DSGi brand reputation among members on HUKD is definitely one of an old, slow, poorly serviced company with weak pricing. That's not where you want to be positioned when your stock is sliding, your international brands are underperforming and hungry competitors are about to storm the gates.

On May 15, 2008 DSGi announced a Transformation and Renewal Programme which is supposed to address their weaknesses and re-organise the group. We think that Bitterwallet readers can probably give better advice though.

So here's the question for anyone who has dealt with DSGi and wants to pitch in suggestions to the comments. How would you fix DSGi?

TOPICS:   High Street News   Games

21 comments

  • RazorD
    Best buy are coming to the UK? Fantastic!
  • Paul Nikkel EDITOR
    Yep - probably first half of 2009. We wrote about them and CDiscount here if you're interested: http://www.bitterwallet.com/as-two-foreign-competitors-announce-major-uk-launches-is-the-future-grim-for-dsgi/1570
  • Jakg
    Best Buy have already tried to come to the UK before (i.e. - they tried to buy a lakeside store, but the MD of DSGi bought it first to stop them). As it is Curries has been dragging down DSGi, while PC World actually makes them some money. The "Transformation and Renewal Programme" aka Fives training won't do much imo though.
  • andy y.
    For years the Dixons group has had a reputation with customers of sharp practice. Passing off returned items as new, outrageous warranty prices, trying to dodge legitimate refunds etc. So as pricing and sourcing has become more commoditised buyers have had no qualms shifting to amazon play or the like, If Dixons had established a long term relationship of trust with customers maybe they would have a loyal base to rely on. Long way round to say "you sow what you reap"
  • andy y.
    Arrgh You reap what you sow What a putz
  • LRGM
    Really nothing can save DSG from those 'in the know' as we all hate them by now and some of us would be happy to see them go. The issue for DSG is that they are there for Johnny Punter to get a TV that day on the never never that the staff know more about credit agreements than they do the products which is shameful. Combine this with a credit crunch/customer fear and a lack of competitive pricing, quality merchandise and expert advice and it will end with a long overdue undoing.
  • Savash D.
    As an ex Manager with dsg for 30 years, I have seen the high and the lows. If i had a Million quid to invest @.18p id be in there at the opening bell and then Id sit and wait. Dsg will come good at this price whatever happens.
  • LRGM
    Savash, I read your comment after mine, and perhaps mine was a bit harsh, but the amount of headache DSG has caused people over the years is well documented. I would be interested to know what you would do with DSG to rescue it based on your experience, my recommendations would be. 1. Staff Training. Somewhere the art of baffling people with too much information to make them buy has been replaced with third rate disinformation. Neither work any more. 2. One Price Rule. Accross the website and instore and brands. Sell this concept to people and it work as long as that price is competitive with the internet retailers. DSG have to sort out that care package and pricing as well. 3. Taking advantage of the high street presence. The actual shops are abysmal relics of the 1980's when there was still some competition on the high street. I don't know how many products are sold ad-hoc from store visits, but I am convinced that the argos model would work so much better for them. To be honest, they are such dinosaurs I am surprised they have even gotten this far into the 21st century the need to change their business model now.
  • Savash D.
    Hi LRGM If you read the CE John Browet statement Annual Report 2007/08 he outlines plan to take the company forward. I would say that the future sucess of any organisation lays with its people. Dsg people must get its act together at all levels building from the sales floor up.Staff training for people that have pride and care and are well rewarded is where i would start. Dsg is undervalued in my view at present. I hold in anticipation share value is set to improve as soon as current global crisis shows signs of turning.
  • detlevba
    dsgi has had its day, its sinking faster than the titanic, its not moved with the times, new products come late to the shelves long after everyone else has them, I used to work for dsgi for 9 years and im afraid its had its day, now is the time for a new company such as best buys to take over and revitalise the pc and white goods market in the UK
  • DSGi
    This time it will sink. Get ready for all the announements regarding closures, take-overs and redundancies in December.
  • mark
    Yes DSGI may be in trouble and yes in the past DSGI has annoyed some customers but as an X employee of DSGI please remember that most of the employee are hard working and honest people and if the company is in trouble then we should all be thinking about those people and there families, I am sick and tied of hearing people say glads it going, shame on you!!
  • Steven
    I know some people past & present at DSGi in Hemel, and I wish them well. While I am always happy to shop at PC World and I find the customer service very good, I loathe Curry's. It's a long story, I won't bore you with the numerous issues I have had with them even taking them to court to get my money back, they truly are a shocking from a customer point of view. I won't even enter their stores. I am not alone. The sooner they realise this and provide a service the sooner they will see some recovery. But it's too late for me, I would rather pay more for electrical products in the knowledge that if I have a problem, I won't be treated like dirt. I am not a difficult customer by any means, just an honest customer who expects customer service.
  • mcozio
    I see 600 tech guy engineers (support arm of dsgi) are to be made redundant on 12th December.... who ya gonna call now when your PC goes wrong.
  • Paul Nikkel EDITOR
    Do you have a link for that mcozio? I can't find it in Google News yet.
  • steven
    They've made all their engineers redundant, rebranding the jobs as "Tech Person" and paying 10K less. Have a look at all the vacancies on the job centre web-site: http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=0&ref=RDC/10108 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=1&ref=NHM/40979 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=2&ref=BDF/23537 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=3&ref=RHL/13424 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=5&ref=BEG/34956 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=4&ref=SNS/20942 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=6&ref=WSQ/118334 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=7&ref=WAB/78688 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=8&ref=WTF/15171 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=9&ref=CFB/144693 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=10&ref=SLU/23073 http://www.jobcentreplus.gov.uk/Internet/viewVacancy.do?selectedVacancy=11&ref=YEA/28908 etc.. The hasn't been a press release to date.
  • Peacemaker
    We are suppliers to Electroworld and honestly, never have met such a bunch of unqualified and disorganized purchasing and managing staff like there. The sooner DSGi gives that business to sombody else the better for all.
  • mcozio
    The employees and ex-employees of DSGi are starting to express their concerns http://www.pocket-lint.co.uk/news/news.phtml/20004/21028/dsgi-makes-250-techguys-redundant.phtm and the news of the tech guy redundancies has reached the press http://www.pcretailmag.com/news/30934/DSGi-downsizes-TechGuys http://www.scenta.co.uk/gadgets/news/cit/1739094/dsgi-makes-50-techguys-redundant.htm
  • Deathwatch B.
    [...] been speculating over the fate of DSGi for several weeks, and then there was the news that the parent group of Currys and PC World had posted a Q2/Q3 loss [...]
  • PC B.
    [...] we’ve published stories concerning tumbling share prices, staffing issues, shock management departures, store mergers, sales techniques or redundancies, [...]
  • savash d.
    Did anyone buy @ 18p? if you didnt its not too late keep watching and learn.

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