ERT Information

DSGi pulls out of Eldorado deal
22 June 2007

Dixons parent company DSG international has abandoned plans to buy Russian retailer Eldorado.

Group chief executive John Clare revealed that DSGi had decided not to pick up the option on Eldorado as the group announced its results for the year to April 28.

"Since we signed our option agreement with Eldorado, we have learnt a great deal about both the company and the market in which it operates," Mr Clare said. "This due diligence has led the board to conclude that it is not appropriate to proceed with this investment."

Despite terminating its agreement with Eldorado, he maintained that Russia was an "interesting and exciting" market and that his company would continue to watch developments there "both commercially and politically".

In the meantime, total DSGi sales in the 52 weeks to April 28 grew 14 per cent to £7.9 billion, with like-for-like sales lagging behind but still up four per cent.

However, underlying pre-tax profit fell to £295.1 million, down from £311m last year.

In the UK, total sales grew one per cent to £2.7m, against £2.6m the year before, while like-for-like sales rose three per cent.

Currys superstores saw like-for-sales grow by four per cent and gross margins improve by 0.6 per cent against last year.

DSGi also praised the performance of its stores that took over from high street Dixons outlets a year ago.

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