The problem in Currys’ Nordics business, first reported last year, was only supposed to be short-term in nature. Yet we’re well into 2023 and the electronics retailer’s Scandinavian division is struggling to such an extent it has had to pull its dividend.
This is a salutary lesson in the reality that problems often take much longer to fix than companies initially think.
AJ Bell’s Russ Mould said: “The Scandinavian business used to get barely any attention and just hummed along nicely in the background serving an affluent clientele in these markets. It now looks like the initial diagnosis for this business turning sickly – namely competitors selling off excess stock at a discount – was not providing the full picture. Or, if it was, then its full extent was not understood.
“The big frustration for Currys is it has made decent strides in getting its business in the UK and Ireland on track, despite the difficult consumer backdrop putting pressure on sales. Profit in this part of the business was up by an eye-catching 45% as it eked out significant cost savings to compensate for lower volumes.
“The bumper loss reported today is a bit misleading as it includes a £511 million accounting charge relating to the 2014 merger of Dixons and Carphone – it’s important to note that this does not represent cash going out of the business.”
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