Comet demise 'to benefit Dixons'
The boss of Dixons Retail today said the Currys and PC World owner was poised to take advantage of the demise of rival Comet.
Chief executive Sebastian James said the group was “outpacing” its competitors and would benefit after Comet fell into administration earlier this month.
Mr James said there may be some disruption while Comet completes the “fire-sale” of its stock, but Currys and PC World were well placed to pick up customers.
Comet’s administrators Deloitte yesterday announced a further 125 store closures, leaving 70 remaining, which will only stay open while stock is cleared.
Meanwhile, Dixons Retail saw like-for-like sales in the UK and Ireland rise 3% in the 24 weeks to October 13 as customers bought new televisions during the summer of sport.
But the group still made an underlying pre-tax loss of £22.2m (€27.4m) over the period, down from a £25.3m (€31.3m) loss in the same period last year.
Mr James said Dixons had taken on 171 full-time staff from Comet, and a further 1,000 workers for its Christmas trading period.
He said: “We think our offering is well suited to those customers shopping at Comet. Those customers will be pleasantly surprised at how good we have become at providing good service.”
Dixons’ loss was driven by the impact of a poor performance by its French online gadget business PIXmania as it wrote down the value of the business in the half-year.
UK sales of £1.59bn (€1.96bn) in the half-year were tempered by a “quieter” August and September as the group ran down stocks of the Windows 7 operating system ahead of Windows 8, which was launched in October.
Mr James said the big item in the run-up to Christmas was going to be the tablet, of which sales were already trebling. He also said smart TVs and headphone sales were going well.
The group said it had made improvements to its website by introducing a better online search. It was also crediting its stores with online sales and introduced a pay and collect service in the period.
Dixons said that while 92% of customer purchases were completed in store, around 80% of its customers’ shopping trips involved the internet in some form.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “Dixons continues to underline its survivor status.
“While arch rival Comet remains in a critical condition, a combination of initiatives including cost savings, store revamps and an ever-greater emphasis on its online offering are driving the group’s recovery.”
The group closed 42 shops in the half-year as part of plans to reduce its estate to between 400 and 420 outlets. It now has 498 UK shops.
In northern Europe, Dixons said its rival Expert had “exited” the market and it had grown underlying sales in sterling by 6% to £1.09bn (€1.34bn) in the division.
But in southern Europe sales were down 9% over the period as the economic woes of Greece proved a challenge.
