DSG to cut investment as trading conditions worsen
DSG International, Europe's number two electrical goods retailer, posted a big fall in first-half underlying sales and said it was cutting investment due to a "significant deterioration" in consumer confidence.
Disney case highlights China supply pitfallsDSG, which trades as Currys and PC World, Elkjop in the Nordic region and UniEuro in Italy, said on Thursday sales at stores open at least a year fell 7 percent in the 24 weeks to October 18, in line with the drop posted after 16 weeks.
Gross profit margins were down 70 basis points.
"Consumer confidence has significantly deteriorated across Europe, particularly in more discretionary areas, in recent weeks," the firm said in a trading update.
As a result, it said it would cut capital spending by 30 million pounds this year.
DSG shares have plunged almost 90 percent over the past two years, hit by downturn in consumer spending and worries over U.S. rival Best Buy's entry into Europe next year.
In May, Chief Executive John Browett halved the group's dividend and laid out a transformation plan focussed on improving stores, cutting costs and developing its online business.
The firm said on Thursday early results of the plan had exceeded its expectations.
Shares in DSG, which runs 1,200 shops and online stores in 28 countries, have underperformed the DJ Stoxx European retail index by 65 percent this year.
They hit a 24-year low of 21.25 pence on Friday and closed on Wednesday at 23.5 pence, valuing the business at about 467 million pounds.
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