Currys and PC World owner DSG International is expected to announce hundreds of store closures that could put jobs at risk under turnaround plans due to be unveiled this week, reports said today.
DSG is believed to be preparing to axe up to 200 of its 700 stores and convert dozens of outlets to a new consumer electronics superstore format that will include both its flagship brands PC World and Currys, according to the Sunday Times.
The revival strategy, which will be revealed on Thursday, marks the first phase of recently hired chief executive John Browett’s plans to get the business back on track after two profit warnings so far this year.
He has been conducting a top to bottom review of the business since joining in December and has pledged to deliver the “value, choice and service that our customers demand”.
Mr Browett has already announced that 40 of its 150 stores in Italy will be shut over the next two years, but the key focus will be on his strategy for the key UK market.
Analysts have said that Mr Browett, who joined the company from Tesco, faces an uphill struggle with consumer spending slowing, competition from the internet and new rivals entering the fray.
Last week, Carphone Warehouse announced a tie-up with US giant Best Buy to launch consumer electronics stores across the UK and Europe from next year in a move that will pit the firms in direct competition to the likes of DSG.
Already under pressure in a competitive market, DSG has been cutting prices to attract increasingly cash-strapped shoppers, but the heavy discounting has started to impact the bottom line. It issued a profits warning last month, bracing investors for lower-than-expected profits of between £200m (€252m) and £210m (€265m) in the year to April 5.
The warning came just four months after DSG lowered forecasts in the wake of a difficult Christmas trading period.
Recent figures from the British Retail Consortium also revealed that electronics goods suffered among the heaviest price falls last month, down 5% year-on-year in a sign of the difficulties facing the sector.
DSG today dismissed the reports of its store plans as speculative. But a spokesman added: “John Browett is the right man for the job and we can’t wait until May 15 when we can have our say.”