Dixons fast-tracks Euro push

HIGH STREET electrical goods group Dixons is expanding its European reach with an ambitious store opening programme in France and Poland. The company said it plans to fast-track the expansion of its PC City format in France with up to 100 new stores.

It also expects to expand its Eastern European brand, Electro World, into Poland, with two new Warsaw-based stores by the end of the year. It currently operates in Hungary and the Czech Republic and believes Eastern Europe offers huge growth potential.

Earlier this month it signed a long-term co-operation agreement with leading Russian retailer Eldorado Group, potentially worth $1.9bn (£1bn), that gives it the rights to take over the entire business by 2010.

Group chief executive John Clare said: 'The Dixons Group is a truly international retail operation and these important strategic moves underpin our leadership position in the European market. Approaching one third of our sales are generated in stores outside of the UK and we have plans for further growth in all countries where we now have a presence.'

Dixons currently operates seven French PC City stores, which are similar to its PC World brand in the UK, and plans to open a further 20 within the next three years. A spokesman said it would take at least five years before it hits its 100 store target.

The brand will employ 3,500 people once the roll-out is complete, up from the current 300. PC City managing director Simon Turner said: 'In the past 12 months we welcomed more than 2m visitors to our PC City stores in France.'

The European expansion is a further example of Dixons' search for new growth opportunities. Two months ago the company admitted that consumer spending over Christmas had been disappointing as demand for 'big-ticket' items fell.

The company insists it is still on course to achieve analysts' forecasts of pre-tax profits of around £345m for the full year despite uncertainty over consumer attitudes in the UK.

Despite the company's robust outlook, analysts have been broadly pessimistic on Dixons' prospects. Most believe that with electricals such as plasma TV screens clearly a discretionary purchase, the group is vulnerable to any further downturn in consumer sentiment.

The shares were down 5½p to 139½p, largely on the back of a poor trading update from B&Q-owner, the Kingfisher Group.