High street electronics retailer Dixons confirmed today that it plans to open up to 80 new stores across the UK and Ireland during 1999. Last year Dixons opened 78 new stores.
The announcement comes as Dixons posted a healthy set of interim results for the half-year.
The group, which also owns Currys, PC World and The Link, saw a pre-tax profit of £80.9m in the 28 weeks to November 14 last year, a 5% increase on the previous year.
Sales also increased 11% to £1.43m, up from £1.28bn. The first eight weeks of the second half, taking in the crucial Christmas period, also showed resilient trading, increasing 14% in total and by 3% on a like-for-like basis, stripping out income from new stores.
The company said its figures were good considering it did not have the gains from the cash windfalls it experienced last year when consumers had extra money to spend after the Building Society converted into banks.
Chairman Sir Stanley Kalms said: “Against the prevailing background of economic uncertainty and last year’s one-off boost to consumer expenditure from the windfall gains, the Group expects to achieve another year of progress.”
Although the company’s stores saw sales increase 11% overall in the first half of the year, like-for-like sales were 2% lower than in the same period in the previous year.
This was put down to falling consumer confidence and the lack of windfall gains.
Domestic appliance sales were also affected by the fall in numbers of people moving house. Lower prices and a slowdown in sales following a strong market over the past two years also hindered revenues.
The television and video recorder markets have also suffered from delayed purchases as consumers wait for the introduction of digital television sets.
The personal computer market has also been affected by the plunge in prices. While the number of computers sold increased by 24%, the value of sales actually fell in value by 2%.
The sales dip has been partly offset by a strong market for digital phones, digital cameras and camcorders, together with the new digital television set-top boxes.
The group said its free Internet service, Freeserve, had attracted 900,000 subscribers since it was launched in September.
Dixons’ sales of £334m were up 4% overall and 1% on a like-for-like basis, with significant increases in sales of widescreen television, mini-disc and digital cameras and camcorders.
Currys’ sales were up slightly at £629m, but sales were down 7% on a like-for-like basis reflecting the exceptional performance the previous year from the windfall tax.
PC World sales, at £362m increased by 35% overall and 3% like-for-like. A further eight new Superstores were opened.
The Link’s sales were £71m, an increase of 57%. The company said 34 new stores were opened, taking the total to 161. Sales in established Link stores grew strongly, with like-for-like sales ahead 14%.
Dixons’ property interests in Belgium and Luxembourg also made an Operating profit of £4m on sales of £39m.
EGi News 13/01/99
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