77 Currys.Digital stores to close, new formats set to be trialled before end of year

DSGi report unveils drastic changes

In the biggest review of its business to date, DSGi has revealed that 77 Currys.Digital outlets are to close, it will trial new store formats before the end of the year – and there will be radical rethink of the product lines it stocks.

The results of chief executive John Browett’s strategic review have been eagerly anticipated, especially since the announcement that Best Buy would be entering the UK and European markets en masse later this year. He has described the "radical and detailed plans" as something that will "transform the very DNA of our business over the next three years."

The five-point plan highlights some some of the failings of the group’s current strategy, whilst reviewing the purpose and strengths of the group’s store formats.

Amongst the most drastic changes outlined in today’s report include the decision not to renew the leases of around 77 Currys.Digital stores in the 177-strong chain, as well as a major refocusing of the store format away from stocking small appliances and white goods – and towards stocking more laptops, accessories and consumer electronics.

PC World is also set to undergo a significant redevelopment to help it become the "destination for computing and new technology digital products and services". Amongst the plans DSGi has for the flagging retailer is a new store format, which is currently being trialled with a view to fitting out ten per cent of all PC World stores before Christmas 2008. No store closures were announced, nor was there any mention of a possible merging with Currys.

Currys will also see a new store format being trialled, with a view to it maintaining its position as the UK’s leading electrical retailer.

Browett also revealed that the group would be trialling one large store format of around 30,000 sq ft to 50,000 sq ft in time for Christmas 2008, though no more details about which store, or stores it may be based on, were revealed in the review.

Something that will be crucial if the retailer is to compete with Best Buy on customer service and staff knowledge is the announcement that the group will be look to significantly improve by "delivering a superior customer experience by helping them to choose the product or service that is right for their needs together with appropriate accessories to provide them with the complete solution."

It also revealed that it would be aiming to improve and develop "training and incentive will be improved for all store colleagues," likely in response to criticism that the group’s staff are underpaid, under-motivated and unknowledgeable about what they are selling. In addition, the retailer will be seeking to improve customer service, not just at the point of sale, but also in aftersales.

Key to that is tied into the review of products that each store stocks. All stores will also see a revamp that will significantly alter the layout of existing stores to improve navigation, as well as providing greater display and interactivity with products. The group also announced that it would be looking to increase the density of products in order to provide more choice in existing stores, without the need to extend them.

One of the more positive aspects of the review was the group’s performance on the internet. It is already the number one electrical retailer in Europe, with over £1 billion in sales in 2007/08. Going forward, the retailer is planning on building upon its success and become "masters of multi-channel retailing". One way it is looking to achieve that is by rolling out PIXmania’s backroom systems across its entire internet retail operations.

Commenting, Browett said: "DSGi has many inherent strengths as a leading specialist electrical retailer, including market leading positions and strong supplier relationships. However, it has not kept pace with its core customer needs, particularly in the UK.

"We will focus the business on delivering an unbeatable combination of value, choice and service for our customers. This includes helping out customers with complete solutions such as connectivity, delivery, installation, repair and converging technology," Browett added.

"We have developed radical and detailed plans that will transform the very DNA of our business over the next three years.

"There is much to do to improve and simplify the business which will improve the customer offer, make us a better place to work and deliver value for our shareholders."

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