DSGi reviews Spanish and Italian chains

News

Matt Grainger Aug 11 2008, 11:44am

Ailing assets may be put up for sale but a buyer may not be forthcoming

Electrical goods giant DSGi has placed its Spanish and Italian subsidiaries under review, possibly with the aim of selling them, according to the Telegraph.

The move comes after two profit warnings earlier this year and is part of a concerted effort to reverse the fortunes of the company, details of which were unveiled by CEO John Browett in May.

In Italy, DSGi owns 116 electrical goods stores under the UniEuro brand and a further nine PC City stores, while Spain hosts 25 PC City outlets.

The sale of these divisions would represents a serious blow to DSGi’s international ambitions, however the move would not be unexpected. Sales for the Italian UniEuro chain dropped by 11 per cent this year, while the Spanish PC City franchise has been hit badly by economic slowdown.

In 2001, DSG paid €103 million (£80.7 million) for a 24 per cent stake in UniEuro, increasing that stake to 96 per cent the following year with a further payment of €368 million (£288 million). Spain’s PC City chain was founded after the £15.8 million acquisition of Ei Systems in 2000.

It is unknown which company might put a bid in for the subsidiaries. Although UniEuro is under severe financial difficulties, it is possible that the division might catch the eye of US computing giant Best Buy as part of its plan to expand in Europe.

Link: The Telegraph