DSG to close 120 stores in the UK and Italy

Home appliance retailer DSG has announced the closure of 77 Currys digital stores in the face of 'challenging' market conditions. The UK retailer intends to close up to 77 of its 177 portable technology retail stores as leases expires in 2012-2103. The company also announced a 50% cut in dividend.

'The trading environment remains challenging across our markets, particularly in the UK, Ireland, Italy and Spain. Customers have become increasingly promotion- and deal- driven, impacting gross margins,' said Chief Executive John Browett. The company forecast challenging conditions through 2009.

'DSG has many inherent strengths as a leading specialist electrical retailer, including market leading positions and strong supplier relationships. However it has not kept pace with its core customer needs, particularly in the UK,' he added.

The company has also anticipated a reorganisation of its business in Italy, particularly via the rationalization of its portfolio with the planned closure of up to 43 stores in the country.

The company said it will focus on strengthening its internet retailing business in the future, which it foresees will increase by up to 30% in the coming few years. DSG is the largest electrical retailer on the internet in Europe with about £1bn sales achieved last year.