Currys firm suffers £140.4m loss

White goods sales at Currys have been hit by the sluggish housing market

The owner of Currys and PC World made an annual loss of £140.4m after closing parts of its business and writing down the value of some of its firms.

DSG International saw like-for-like sales slump in the year to 2 May as customers cut back on electrical goods.

And it added the "difficult economic backdrop across Europe and subsequent impact on consumer spending" was expected to continue.

The firm wrote off £190.9m from its UK, Sweden and Finland businesses.

Pre-tax profits, without the exceptional items, fell by 77% to £50.5m.

Earlier this week, Kesa Electricals, the company that owns Comet in the UK and Darty in France, reported a full-year loss and predicted another difficult year.

White goods woes

Shares in DSG have fallen by about a third in the past year.

In the UK and Ireland, like-for-like sales fell 11% with Currys and Currys.digital, suffering from a "very tough market".

It added that white goods had been particularly hit by the slowdown in the housing market, but had stabilised in the latter part of the year.

But there had been strong growth in the sale of laptops and netbooks it added.

The management outlook is cautious and any prolonged deterioration in the wider economy will continue to stress the business model Richard Hunter Hargreaves Lansdown Stockbrokers

Chief executive John Browett said that there had been no big upward or downward shift in consumer demand.

"We're seeing the pattern of a normal recession, that recession is widespread, and impacts on all the markets we're operating within," he said.

'Reasons for hope'

The firm is hoping to roll out up to 50 revamped superstores in the UK as part of a turnaround plan and said rapid progress was being made with the refurbishment programme.

The revamp programme has included 30 Currys Superstores, which have seen profits grow by between 23% and 65% compared with the rest of the chain, which DSG said was "strongly ahead of management's expectations".

The firm added that it had reduced costs by £95m during the year, and was aiming to save a further £200m in the next four years.

"There are some reasons for hope," said Richard Hunter of Hargreaves Lansdown Stockbrokers.

"The revamping of some of its stores seems to be having a positive impact on margins, and there are certain goods which continue to sell well.

"On the other hand, the management outlook is cautious and any prolonged deterioration in the wider economy will continue to stress the business model."