DSG orders staff to shape up in bid to head off crisis

DSG International, the Currys-to-PC World electrical retailer, is retraining 20,000 of its in-store sales staff in an attempt to radically improve service and save itself from widely predicted doom.

With the City questioning whether the group has a future, chief executive John Browett today offered an upbeat outlook and said a fresh look to the stores would bring back custom.

The retraining will include a shake-up of pay structures which will see the best sales people better rewarded. "Service is patchy and we need to improve it. We can do better," he said.

In particular, customers seeking help linking-up different products - converging technology, in the jargon - should find that the advice available is better than before.

Browett arrived from Tesco last December, walking into a company on the verge of a crisis. He had pledged to "transform the DNA" of the group.

Unveiling profits for the year to the end of May down a third at £205 million, he said it was "very difficult" to tell if the company is in worse shape than he expected, or if the economy has exacerbated existing problems.

Cost cuts are on the way, and headoffice job losses are expected as DSG looks to cope with the added competitive threat of US giant Best Buy, which is entering the UK via a joint venture with Carphone Warehouse.

DSG, in the FTSE 100 as recently as last year, has seen its share price devastated. Today the shares fell ¾p to 45¾p, leaving the company valued at a meagre £745 million.

Nick Bubb at Pali International has dubbed the company the Doomed Stores Group. He said: "We sense that internal confidence at DSG is surprisingly high, but if Best Buy doesn't get them the UK recession will."

Browett said: "The stock market has a curious sentiment towards retailers at the moment. We think the business is dramatically undervalued." He added that he won't be selling off any businesses at the moment. "This is not a market for doing any corporate activity," he said.

Some investors think he should sell the troubled Italian arm at any price.

Sales in the year rose 8% to £8.5 billion - £1 billion of which came online. Dividend payments this year are 5.45p, down from 8.87p.