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Currys owner Dixons Retail to 'benefit' from Comet woe | |
(about 2 hours later) | |
Dixons Retail, the owner of Currys and PC World, said it will "benefit" from the demise of rival Comet. | |
Dixons said the "fire sale" of Comet's assets and stock could cause "some disruption" initially, but that it would gain in the long run. | |
However, Dixons posted a half-year loss after taking a big hit on the value of its online gadget subsidiary Pixmania. | |
Pre-tax losses for the 24 weeks to 13 October were £79.5m, compared with a £2.4m profit a year earlier. | Pre-tax losses for the 24 weeks to 13 October were £79.5m, compared with a £2.4m profit a year earlier. |
The company said it had made a £45.2m writedown in Pixmania's value. | |
'Survivor status' | |
Comet went into administration in early November, and on Tuesday its administrators announced plans to close a further 125 stores from next month if a buyer could not be found, which would leave just 70 Comet stores from the original total 236. | |
Dixons said that while the sell-off of Comet's stock could cause disruption", it said Currys and PC World would eventually "benefit from the consolidation". | |
href="http://www.dixonsretail.com/dixons/en/mediacentre/mediapressreleases?id=567" >Announcing the results, group chief executive Sebastian James said the company had made "good early progress", despite Pixmania's "poor performance". | |
Total group sales rose 4% to £3.29bn. In addition, its business in UK and Ireland returned to profitability for the first time in five years. | |
Group net debt had fallen to £9.9m, down from £143.2m a year earlier. | Group net debt had fallen to £9.9m, down from £143.2m a year earlier. |
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "Dixons continues to underline its survivor status. | |
"While arch rival Comet remains in a critical condition, a combination of initiatives, including cost savings, store revamps and an ever greater emphasis on its online offering, are driving the group's recovery." | |
Dixons said it was continuing with its multichannel strategy, enabling customers to research and order goods online via PCs, tablets and smartphones. | |
While 92% of sales were still completed in-store, 80% "involve the internet in some form", the company said. | While 92% of sales were still completed in-store, 80% "involve the internet in some form", the company said. |
Pixmania problems | |
Dixons bought 77% of Pixmania in 2006 but had to write down the value of the French online retailer in 2011 after poor performance. | |
French consumers seem to prefer service-led, rather than online-only, retailers, Dixons believes. | |
In August, the latest writedown convinced the group to buy the 22% stake owned by the Rosenblum family, in the hope that taking full control of Pixmania would help reverse the decline. | |
Dixons says it plans to cut costs and reduce the company's complexity. | |
Pixmania's like-for-like sales were down 7% to £198m in the first half, compared with £234m for the same period last year. |