Dixons steps up turnaround plan

Dixons Retail has stepped up its turnaround plans after issuing a profit warning on the back of disappointing sales performance in the fourth quarter.

The electricals retail group, which owns the Currys, PC World and Dixons.co.uk brands, reported a 7% fall in like for like sales in the 11 weeks to 26 March. For the year like for like sales, which exclude new stores, fell 2%.

Dixons’ Star Wars advertising campaign starring R2-D2 and C-3PO has failed to lift sales in the UK where the group reported an 11% drop in like for like sales.

The group says it is now planning on the assumption that the consumer environment will remain “subdued” and has outlined a four-point plan to tighten its focus on cash generation.

Dixons plans to focus on “winning markets and formats” such as its dual branded 2 in 1 superstores. It could also exit the Spanish market.

John Browett, group chief executive, says: “Consumer confidence across some of our markets is fragile and we expect it to continue to be so through much of 2011. As a result we are setting out the steps we are taking to secure the delivery of the renewal and transformation plan.

“Our renewal and transformation plan is working; customers are experiencing better store environments, improved ranges and increased levels of service. Notwithstanding the current tough conditions, we continue to make the business better for customers, easier for our colleagues and cheaper to operate.”

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