Dixons defiant as its sales hold up

Dixons offered some hope today that it could emerge from the retail wreckage on the high street to be the last major electrical goods store standing.

Its half-year results today were notably better than gloomy City forecasts, prompting a welcome rise in the devastated share price.
In the past few weeks two major rivals have fallen by the wayside.

Comet was offloaded by parent company Kesa to private investment house OpCapita, and US giant Best Buy abandoned its UK arm, admitting defeat in a competitive market.

The City is unsure whether these events indicate that Dixons also has no future or that it will prosper because it is the best business.

Chief executive John Browett reckons it is the latter. "The reason why they were in trouble is that our customer offer is better," he said.

"We are the people giving the pain in the market place. There needs to be a specialist electrical retailer like ours."

Sales in the 24 weeks to 15 October rose slightly, good news for the 20,000 UK staff.

The company, which also owns PC World, recorded a loss for the period of £25 million, but that is about £5 million less than City analysts had pencilled in.

Browett says that suppliers of electrical goods desperately want Dixons to showcase their
new gadgets.

"It is the only way they can bring and explain new technology. You can't do that online," he said.

Browett claims that customers have never been more satisfied with the service they get in-store and reckons he can make money from repairing goods as well as selling them.

Debts have been cut from £215 million to £143 million. Total sales across the group, which include the Nordic arm, rose 1% to £3.3 billion.

Kate Calvert at Seymour Pierce said: "These were never expected to be great results given the weak consumer environment and difficult comparison with the World Cup and iPad launch last year.

"Despite this, the UK has benefited from tight cost management and an improving gross margin."

The shares added 1p, or almost 11%, to 10.33p.