Comet’s demise spells good sales news for rival Dixons

Parent company Dixons said trading over the past month has been boosted by the launch of Microsoft’s Windows 8.

Dixons’ like for like sales rose three per cent in the six months to October 13, led by a strong first quarter when shoppers bought tablets and televisions in preparation for the summer of sport.

Dixons reported a first-half profit of £5.6m in Britain and Ireland, having made a loss of £6.0m a year ago.

Market share gains elsewhere in northern Europe partly offset tough southern European markets, but the group made an underlying pre-tax loss of £22.2m in the 24 weeks to October 13, an improvement on last year’s £25.3m half-year loss.

Losses in southern Europe narrowed to £13m from £15.6m.

Analysts expect Dixons to make an £87m profit for the year to April 2013 following a stronger second half which contains Christmas and the New Year.

The demise of Comet, which had six per cent share of the British market, gives Dixons the chance to build on its 19.8 per cent share.

Panmure Gordon analyst Philip Dorgan said Comet’s exit could add £30m to Dixons’ operating profit next year.

Hargreaves Lansdown analyst Keith Bowman added: “Dixons continues to underline its survivor status.

“While arch-rival Comet remains in a critical condition, a combination of initiatives including cost savings, store revamps and an ever greater emphasis on its online offering are driving the group’s recovery.”

However, Comet’s closing down sales could disrupt the key Christmas trading period.

Dixons has taken on 171 full-time staff from Comet, and a further 1,000 workers for its Christmas trading period. Dixons’ chief executive Sebastian James said: “We think our offering is well suited to those customers shopping at Comet. Those customers will be pleasantly surprised at how good we have become at providing good service.”

UK sales of £1.59bn in the half-year were tempered by a “quieter” August and September as the group ran down stocks of the Windows 7 operating system ahead of Windows 8, which was launched in October.

Mr James said the big item in the run-up to Christmas is going to be the tablet, which has seen a threefold rise in sales.

He also said smart TVs and headphone sales are going well.

The group said it has made improvements to its website by introducing a better online search and it has introduced a pay and collect service.

Dixons said that while 92 per cent of purchases are completed in store, around 80 per cent of its customers’ shopping trips involve the internet in some form.