PC World owners report “strong performance” over Christmas

by Mark Tyson on 17 January 2013, 12:30

Tags: PC World (LON:DXNS)

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After the recent spate of bad news for high street technology and entertainment retailers it’s good to hear that some companies with bricks and mortar stores in the UK are doing well. Today Dixons, Argos and Primark all reported good sales over the Christmas period in encouraging and optimistic press releases.

Dixons Retail

Let’s pay particular attention to Dixons Retail as, owning PC World and Currys, that’s of most interest to HEXUS readers. Dixons released its trading statement this morning, covering the period of the 12 weeks ending 5th January 2013. The statement starts off well; even the title is upbeat, trumpeting “Continued strength in key markets”. The firm reported that like-for-like sales were up by 8 per cent in the UK and Ireland. In Europe the firm fared even better with sales up by 11 per cent. However, due to lower margins from the products it sells, the full year underlying profits are “expected to be in line with market expectations of £75 million to £85 million”. This good news surprised the markets; the share price had fallen in the previous two days in anticipation of the results.

Rather than just benefitting from high street competition collapses, like that of Comet, Dixons Chief Executive, Sebastian James thought the gains were due to the company’s “compelling offers” and “seamless multi-channel” offerings. He wrote in the statement that “Our key multi-channel businesses delivered an encouragingly strong result during the Christmas period, particularly in the UK & Ireland and in Northern Europe.”

Across the festive period tablet sales were particularly strong, echoing what Carphone Warehouse reported in November. Sebastian James wrote “Tablet sales were phenomenal across our markets, which was good to see but which impacted overall headline margins somewhat.” That shows there isn’t a lot of profit to be made upon each tablet sale.

Argos and Primark

Sky News reports that Argos and Primark were also winners over the festive period. Argos said that its like-for-like sales were up by nearly 3 per cent in the 18 weeks leading up to 5th January. The company says it has had some success in “re-inventing” itself as a strong “digital retail leader”, with 42 per cent of its Christmas sales done online. Tablets and mobile sales were of particular note with mobile phone sales up by a whopping 125 per cent.

Total sales at Primark, owned by Associated British Foods, were up by 25 per cent in the 16 weeks to 5th January and to help that figure it actually opened 14 new stores over the period.



HEXUS Forums :: 14 Comments

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So DSG picked up some would-be Comet customers and a budget shop (Primark) did well, no suprises there. I'm not sure how Argos are doing so well though, I'd have lumped them in with all the “old guard” highstreet chains that are failing. That said, I see quite a lot of Argos deals on HUKD so they must be doing something right!
Bagnaj97
So DSG picked up some would-be Comet customers and a budget shop (Primark) did well, no suprises there. I'm not sure how Argos are doing so well though, I'd have lumped them in with all the “old guard” highstreet chains that are failing. That said, I see quite a lot of Argos deals on HUKD so they must be doing something right!

well I imagine they are being competitive with online prices.

Also as their shops are basically warehouses with a till front I imagine their running costs are lower. You don't really get the same advantages of being able to see what you are buying like a normal shop, but unlike online retailers you can buy it on the spot (sort of)
I've always found Argos to be amazingly cheap, I've just moved to a new flat and bought loads of furniture there. They seem to have pretty good prices on electricals as well. Plus, their website is fairly decent and it's always easy to reserve and collect stuff in store, unlike other places that don't properly reserve items, or sometimes try and charge you more when you pick it up.
DSG are now about the only broad portfolio electronics retail chain left (all others have a narrower selection i.e. just phones/tablets, are much smaller or went out of business), with no major competition they should be able to continue, a lot of people (as in general people not nerds) will value the advisers and hands on etc that you can't get online… so long as they can use their size and buying power to keep prices low.

Argos' catalogue model is a good halfway house between high street and online with benefits of both - instant acquisition, easy returns AND huge stock selection and low prices.

Primark flourish because in fashion where things are short lived anyway the lower quality isn't a huge deal and the low prices keep the flocks coming in when times are hard.

I can see why these three are doing well in a poor market.
daniel.phillips;23437
I've always found Argos to be amazingly cheap, I've just moved to a new flat and bought loads of furniture there. They seem to have pretty good prices on electricals as well. Plus, their website is fairly decent and it's always easy to reserve and collect stuff in store, unlike other places that don't properly reserve items, or sometimes try and charge you more when you pick it up.

You can also buy the exact same furniture in Homebase - same parent company, also owns Laura Ashley and Habitat now AFAIK.