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Dixons shutters 106 stores
Dixons Stores Group (DSG) is closing more than 100 High Street stores after poor trading.
In an update released before the London stock market opened this morning the retail chain revealed slightly improved group trading, but said Dixons had performed particularly badly. As a result the chain will shut 106 shops within the next three months. Some staff will be found jobs elsewhere in the group. DSG runs Currys, Dixons, PC World and the Link. It also runs five brands in the Nordic region, 23 PC City stores in France, Italy and Spain and stores in Hungary and the Czech Republic.
The news follows outspoken comments from Tony Shiret, analyst at CSFB, in January. He predicted Dixons would be forced to shut up to half its existing stores because of falling profits and margins. Dixons dismissed his comments as "speculation".
A DSG spokesman told The Register: "It's 106 of our 320 High Street stores but that's only two per cent of group floor space. They are mainly smaller stores, typically less than two thousand square feet." The spokesman added that about 1,000 staff would be affected, 650 of these are full-time. The spokesman said: "Consultation starts today so no decision has been made on staff."
The announcement was made ahead of financial results which are out 23 June. It expects group profits to be in line with expectations. Group sales were up three per cent on a like-for-like basis. Growth in the UK was just two per cent. The group has set aside £48m to pay for the closures.
But Dixons has continued to disappoint. Tests of its rejigged "Dixons XL" stores will continue. A spokesman said there were some encouraging signs from the tests but no decision has yet been made.
DSG is selling 27.8m Wanadoo shares, which, taken with its earlier sale of 48.4m shares, adds up to an exceptional gain of £80m. ®