DSG International Plc, Europe's second-biggest consumer electronics retailer, reported slowing sales of refrigerators and dishwashers and said it's "cautious'' about the outlook for 2008.
The market for large household appliances has been "more subdued'' in the past eight weeks with a "single-digit'' drop in sales, Finance Director Kevin O'Byrne said. The company reported a 25% gain in first-half profit after prior-year costs for moving its distribution centers.
Falling UK house prices and the reduced availability of credit after the collapse of the U.S. subprime mortgage market may hurt business next year, O'Byrne said. Yet, the retailer is well prepared' for the peak Christmas selling period. Flat-screen televisions, which to date have only penetrated 30% of the potential market, and digital music players are fueling sales growth for the company.
First-half revenue rose 8.3% to 3.38 billion pounds (approx. US$7 billion). Sales at stores open at least a year rose 5%, slowing from 6.6% in the first 16 weeks of the period.
In Italy, where DSG is trying to stanch a sales decline in its UniEuro division, same-store sales fell 8%. (Bloomberg)