DIXONS' OWNER DSG International, the largest electrical retailer in the State, has warned of "challenging" market conditions in its Irish business as sustained weakness in key areas of the economy spills into the retail sector.
The warning came as the company's parent reported its first annual loss since 1994. London-listed DSG, which has come from a standing start 13 years ago to surpass its Irish-owned rivals, yesterday reported a 5 per cent rise in Irish sales for the year to May 3rd. The actual figure was not disclosed but, given revenues of €199.78 million in the previous year, sales are thought to have risen to some €210 million.
Declan Ronayne, managing director of the company's Irish unit, declined to say whether the company had reduced its operating profit margin, 5 per cent in the previous year, to drum up sales. "What we've said is that trading conditions in Ireland are challenging. I don't think that's a surprise to anyone," he said.
"We're pleased to have grown the business last year. We are the largest electrical retailer in Ireland by quite a distance and we will continue to invest."
Mr Ronayne declined to reveal the like-for-like sales performance of the business last year, which strips out the impact of new store openings. DSG reduced the pace of its expansion last year to open only one company-owned store, a Currys outlet in Santry, Dublin. Its only other opening last year was a Currys franchise operation in Letterkenny, Co Donegal.
The company, which will open a Currys outlet next week in Dundalk, said it will open a "minimum" of two Currys superstores in this fiscal year.
"We're not finished yet in terms of store opening. If we're going to grow our business on a like-for-like basis we're going to have to gain market share and I'm confident we've strong plans to achieve that," Mr Ronayne said.
While acknowledging difficult market conditions as consumers curtail their expenditure, he did not believe the business environment was "wildly more challenging" than six months ago.
"Consumers have been cautious for a while now," he said.
The losses in the DSG parent company came after a writedown of the value of its loss-making Italian unit, which will close a total of 43 shops. The net loss was £260.8 million (€328.84 million) or 14.4p per share, compared with a profit of £5 million in the prior period. The retailer has suffered as European consumers spend less and buy electronics from supermarkets or the internet. DSG shares slipped 5.6 per cent to 42.5p in London.
Separately, it emerged that Kerry-owned chain Kiely's Electrical - with outlets in Killarney, Tralee, Ennis and Limerick - has gone into liquidation.
Tom Kavanagh of Dublin firm Kavanagh Fennell and Marcus Treacy of Killarney firm O'Connor Kelleher Treacy have been appointed joint liquidators to the business, registered as Seamus Kiely Ltd, which had a pretax loss of €1.16 million last year.
The Irish Timeswas unable to contact any of the firm's directors.
