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By | Tim Richardson 22nd June 2005 08:37

Dixons preps corporate makeover

Can't mask that revs up, profits down, though

Dixons - the UK high street electrical retailer - is to change its name as part of a corporate makeover.

Now that the company operates in 13 European countries, is eyeing further expansion and has a string of different brands including PC World, Elkjop and Kotsovolos, it seems calling the firm "Dixons Group plc" is "no longer reflective of the Group's scale and reach and is too closely associated with the Dixons chain".

And even though the oh-so-familiar Dixons chain - for punters in the UK, that is - is still a "valued brand", execs reckon that because it now accounts for less than 10 per cent of group sales, it's time for a change.

Which is why the company announced today that it is to seek shareholder approval to change its name - at minimal cost - to DSG International plc.

However, no amount of corporate rebranding will mask the fact that while takings were up last year profits were down.

Dixons reported that total sales across all its business were up 8 per cent to £6.98bn in the year to April, compared to £6.49bn a year earlier.

Sales from its retailing operations outside the UK topped £2.16bn with a third of group sales generated from outside the UK in the second half of the year.

Pre-tax profit for the year was down 8 per cent to £336.8m.

In the UK, Dixons is still being hit by a "challenging trading environment" as UK consumers think twice before splashing out on electrical and digital goods.

And although the flat panel TVs, digital cameras and internet audio products all did well, games consoles, CRT televisions and 35mm cameras proved to be a turn-off for consumers.

And even though Dixons is selling more PCs, overall sales of computer gear fell by 10 per cent prompted by a sharp fall in prices.

Said Dixons chief exec John Clare in stock exchange statement: "The Group achieved further profit growth in a challenging year. In the UK it was a year of two halves, with strong like for like sales growth in the first half offset by the impact of tougher conditions in the second half as retail expenditure slowed.

"The outlook for the year ahead is uncertain, but we are anticipating a challenging trading environment, particularly in the UK and Italy."

However, he promised to focus on the company's international expansion which he said would be a "significant engine of future growth".

Dixons share price remained unchanged in early morning trading at 155p. ®

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