DSG Group status / * * Warning for those purchasing from DSG (Currys/Dixons?PCWorld)

opaque

Maybe it's just an indication of how bad some people think DSG stores are?
That in itself is justification for rumours and critisicm.

I'm sure Enron, Lehmann Brothers, Bears Stearn all said they were international, renowned companies with great margins. Before they collapsed.
If the company is in such a good state why have insurers withdrawn supplier insurance?

Personally I don't think DSG will go into administration but they need to sort out a hell of a lot of things. Stick to PC World maybe and dump Currys or my prefered solution. Merge the TV section of Currys into PC World and sell everything else online.

D_e_n_i_s_e

DSG wont be going down . . . . yet

with each passing day new entrants are entering this competitive dog eat dog electrical market

CDDiscount being one of the latest

What it means is that those with a good service background, make the customers purchase a memorable experience will regain and retain customers, the rest will fall

DSG group have a poor poor service background and an ever worst aftersales approach (google and ul see)

I for one window shop in there stores but buy elsewhere, a customer is quite fickle, mess them about once and ul lose em, brand loyalty goes out the window quite quick. The DSG group havent quite figured this out yet - yet they've been in business for years!

there was a report in yesterdays local paper that the local currys had flogged some lady with a 5 year warranty on a fridge/freezer. which the manufacturers had included with the product, apparently the elderly persons daughter noticed one month after the product had been bought and currys tried refunding the currys extended gaurantee purchase with vouchers!

hear these sort of stories one to many times and you can see why people are turning away in droves!

You can see why so many people become reluctant to purchase with DSG

a news article was saying that DSG profits like for like will be down 'considerably'

theres only one way its going to go . . . from bad to worse

D_e_n_i_s_e

P.Robson wrote: »

One last comment, the refurbishment process that i remember seeing in a previous post, this is happening to every single PC World, not too sure about currys but i know 100% that they were thinking about it, these refurbishments cost atleast £400,000 each store, hence why we have alot more lines of products in comparison to other stores.

money probably better spent on providing better customer service?

training for sales staff so they know what they are talking about?

improving online stock checkers so that it actually reflects what they have in store?

offering free deliveries/extended warranties like John Lewis / M&S?

its funny seeing that DSG were in thehome electrical market before the likes of tesco, amazon, John Lewis, M and S and are now playing catchup with them!

At least £400,000 makeovers with DSG its all about style over substance

scarlets_knees

If we all talk a company down we will find it a self-fulfilling prophecy. Every article about the recession talks of confidence being the issue above all else. Here is today's trading statmeent from DSGi...

---

7.00am, 15 January 2009
DSG INTERNATIONAL PLC
INTERIM MANAGEMENT STATEMENT
DSG international plc, one of Europe’s leading specialist electrical retailers, is today updating the market on
trading for the 12 weeks ended 10 January 2009.

• In the 12 week period, total Group sales were down 1% in sterling and like for like sales were down 10%.

• In the two week period to 10 January, Group like for likes were up 2%, with a better performance in UK computing and electricals and with Nordics flat.
• Gross margins across the Group were down 0.8% year on year, primarily as a result of both the increased proportion of revenue in the sale period as well as a higher mix of televisions and laptops.
• The Group remains focused on cash, cutting costs, managing margins and reducing stock.
• Further cost reductions in the current year of £20 million in response to trading environment, bringing total cost savings for the year to £95 million.
• Careful stock management has resulted in stock levels 16% lower than last year at constant exchange rates.
• The Group is operating within its £400 million committed credit facility which is currently undrawn and available, although it is expected that some drawdown will occur in the final quarter, as anticipated.
• Renewal and Transformation plan on track:
• New format stores continue to perform strongly with sales 15% to 25% ahead of the rest of the chain;
• 41 PC World, 11 Currys Superstores, 4 Currys.digital, 1 Currys Megastore and 1 trial combined PC World and Currys store all traded through Christmas Peak;
• Currys Megastore sales and gross profit contribution exceeded expectations and should generate over £30 million of sales per year.

John Browett , Chief Executive, commented:
"The sales pattern through the period was as we anticipated with customers waiting for the post Christmas sales to purchase discretionary products, particularly televisions and laptops. Our Renewal and Transformation plans continue to progress well. Early results from the new store formats, which have now traded through Peak, have continued to exceed our expectations and give us confidence that our plans are delivering for our customers. We expect 2009 to be challenging across most of our markets and are actively planning and managing the business for negative like for likes.”

---

The most interesting line I think is "The Group is operating within its £400 million committed credit facility which is currently undrawn and available," Assuming that stays in place, and I doubt they would mention it if it was in imminent danger, then they are pretty stable in the short to medium term.

However i agree with many. I know no one who has a good word for Curry's / Dixons (and Comet for that matter) so they need to radically look at themselves and see how they can re-invent for the current economy.

opaque

When people were saying it was really bad for Debenhams and Next to have a 2-3% drop in sales how can 10% not be bad?
I think the think with DSG that it is a group and the results are published as such. As has been mentioned it's not the group as a whole that is at risk, more than one section is bringing down the others (ie Currys making a loss and PC World making a profit).

I found this interesting in that statement:
1 trial combined PC World and Currys store

Nice to know they are experimenting, that's what I think should happen on a large scale.

The line about £400 million committed credit facility. Does that mean anything? Surely that means they have an overdraft facility of £400 million they can call on. That's not the same as saying 'we have £400 million of ready cash assets'. Anyone can borrow money, look at the loan debts of the companies that have collapsed recently, they had credit facilities going into the hundreds of millions as well. Didn't help them did it, just dragged out the inevitable.

Scarlets_Knees is right, they're not going down the pan (even if people think they deserve to due to collective experiences of poor customer service, over-pricing etc) but they should take it as a hint that they need to work on re-inventing themselves and changing how they work.

ianfabris

The company I work for recently pulled out of a merger deal because the banks providing the 'commited credit arrangement' continued to guarantee the loans involved, but raised the interest rates so high that 'it would have been cheaper to buy it using a credit card' (quote).

Having credit in place is one thing, but can they still afford to use it ?

Patr100

• 41 PC World, 11 Currys Superstores, 4 Currys.digital, 1 Currys Megastore and 1 trial combined PC World and Currys store all traded through Christmas Peak;

Do they really only have 4 Currys.digital stores ?- I know of at least 2 near me.

opaque

1 in Cambridge as well which I can't imagine will last too long.

This BBC News article is from when they announced they were closing 77 out of 177 last year.
http://news.bbc.co.uk/1/hi/business/7402090.stm
But as that was going to be over the next 5 years there can only be a few less than 177 atm.

So I guess only 4 of the currys.digital stores were open all over Christmas? Sounds rather odd though doesn't it.

woohoo_postingid

Patr100 wrote: »

Do they really only have 4 Currys.digital stores ?- I know of at least 2 near me.

I think (in the context of the statement) that these are new / refurbished stores.

They definitely have more than 11 Currys superstores, that's for certain and I would guess, more than 41 PC World stores.

finbow

woohoo_postingid wrote: »

I think (in the context of the statement) that these are new / refurbished stores.

They definitely have more than 11 Currys superstores, that's for certain and I would guess, more than 41 PC World stores.

your right, the original op of this didn't format it well should read....

Renewal and Transformation plan on track:

• New format stores continue to perform strongly with sales 15% to 25% ahead of the rest of the

chain;

• 41 PC World, 11 Currys Superstores, 4 Currys.digital, 1 Currys Megastore and 1 trial combined PC

World and Currys store all traded through Christmas Peak;

• Currys Megastore sales and gross profit contribution exceeded expectations and should generate

over £30 million of sales per year.

so as you say this is refering to the new winning new revenue stores, which impressively are 15-25% out performing normal stores.

*edit : MSE seems to mess the formatting up!!