UK electrical products retailer Dixons Retail plc (LSE:DXNS), which owns Currys and PC World, said today that it expects to benefit from the demise of rival Comet.
In its interim report for the the six months to October, Dixons said that it expects some disruption in the market in the short term while Comet completes the “fire sale” of its stock, but ultimately Currys and PC World will benefit from the consolidation.
Comet went into administration in early November and its administrators, Deloitte, announced this week that another 125 stores are planned to close from next month if no buyer is found. That would leave just 70 Comet stores remaining, from the original 236.
The administrators are in talks with a small number of potential buyers and are looking to sell the business as a whole, including the physical stores and the online division. However, if a buyer for the troubled firm is not found Deloitte will end up selling off the assets of the group, including store leases, the remaining stock and the brand and website.
Dixons’ half-year results released today show a pre-tax loss of £79.5m, compared with a profit of £2.4m a year earlier, after the group recorded a big writedown on its online gadget business PIXmania. Chief executive Sebastian James said that the group had assumed full day-to-day control of PIXmania and was now taking actions to improve its poor performance.
Elsewhere in the group, Dixons has improved its performance in Southern Europe and has seen good underlying profit growth in the UK and Northern Europe, the chief executive noted. In the UK and Ireland the group made a first-half profit for the first time in five years.
Total group sales for the six-month period rose 4% to £3.29bn.