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By | Kelly Fiveash 12th May 2008 11:26

PC World, Currys staff to be dumped in DSGi rescue plan?

Best Buy could bid for electrical retail giant

Hundreds of PC World and Currys staff could see the job axe swing on Thursday (15 May) when the stores’ owner DSG International (DSGi) announces its latest trading statement and strategy review.

DSGi is understood to be closing 200 of its 700 stores as well as considering switching its outlets to a new superstore format, according to a number of speculative reports.

Meanwhile, shares in DSGi shot up as much as 11 per cent this morning, on rumours that the firm could see a bid approach from Best Buy following its cosy tie-up with Carphone Warehouse last week.

The struggling electrical consumer goods retail giant’s newly installed CEO John Browett has issued two profit warnings to the City so far this year because of a depressing slump in sales.

Browett, who previously worked at Tesco before joining DSGi in December last year, is expected to announce hundreds of store closures under plans to turn the fraught retail giants’ fortunes around. That painful decision is likely to impact jobs at the firm.

The revenues slide has already blown a massive £30m hole in the company’s pre-tax profits. DSGi admitted last month that heavy discounting for its cash-strapped customers had impacted its bottom line.

It now expects to see between £200m and £210m for the year – consensus forecasts had initially been set at £242m.

The Hemel Hempstead-based firm currently has more than 1,300 stores and online stores, and some 40,000 staff based in 28 countries.

Browett already confirmed that 40 of DSGi’s 150 stores in Italy will be closed over the next two years. The latest speculation points to an overhaul of the company’s key UK market.

In direct competition with DSGi, US retail giant Best Buy entered the fray last week with the announcement that it had signed a deal with Carphone Warehouse to launch consumer electronics stores throughout the UK and Europe from 2009.

The Register asked a DSGi spokesman if he could comment on any possible job cuts, but he dismissed reports as “mere speculation”, and said no official announcement will be made until Thursday. ®

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