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Dixons to close more UK stores despite seeing Apple iPad boost profits

Dixons to close more UK stores despite seeing Apple iPad boost profits

Dixons Retail (LON:DXNS) will close more stores in the UK than expected despite boosting profits thanks to the launch of Apple’s (NASDAQ:APPL) new iPad.

The Currys and PC World owner plans to reduce the number of UK stores from 557 to between 400 and 420, having already axed more than 50 stores in the past year in an effort to cut costs.

The company underlined the importance of its Renewal and Transformation plan, which includes making cost reductions of £90 million over the next two years in the form of more store closures.

The group said it is making good progress across UK & Ireland and Northern Europe, though tough conditions hit sales further south.

Total group sales for the full-year to April remained flat at £8.2 billion and fell by 3 per cent on a like-for-like basis, while underlying profit dipped to £129 million.

However, the consumer electronics retailer was encouraged by the figures from the UK & Ireland, where it saw a 15 per cent surge in profits to £79 million, driven by strong demand for Apple’s new iPad.

Although like-for-like sales were down four per cent for the full-year, they rose eight per cent in the final quarter.

But the robust domestic performance was outshone by star performer Northern Europe, where sales grew 11 per cent to £2.6 billion and profits were up 12 per cent to £114 million.

The company, which issued two profit warnings last year, reported losses of more than £30 million in Italy, Greece and Turkey as the economic crisis continues to take hold of the southern Europe region.

Online retail arm Pixmania also suffered after reporting losses amounting to almost £20 million last year having made a profit the year before.

Chief executive Sebastian James said: “Against a tough economic backdrop, we have continued to deliver on a clear plan to transform the business and today we are setting out our three strategic priorities to further improve our market position and build a business that is stronger, more profitable and sustainable.

“The new financial year has got off to a good start with the trends seen in the final quarter of last year broadly continuing,” he added, whilst also warning that the board is still cautious amidst a tough trading environment.

Shares in the company rose 5 per cent to 16.8 pence on the news.

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