DSGi death watch? 52-week stock low

Is DSGi on its last legs or on the cusp of a strategic re-organisation that could pull the business back together? The last year has not been kind to the group which includes top UK brands Currys, PC World and Dixons as its stock price has plummeted down from a 52-week high of 122.50p to a meager 18p during trading on Thursday.

Online, DSGi deserves credit for rolling out early and focusing resources on building their internet sales but their pricing has failed to keep up with hungry competitors like Play.com and Amazon. The imminent arrival of two big foreign players, CDiscounts (part of Casino group from France) and Best Buy (the giant American retailer) does not bode well for any remaining market share DSGi is clinging on to.

The Sunday Times reported last week that DSGi had hired Polish corp finance firm, Saski Partners, to sell off it’s long-suffering Electoworld division. The Register subsequently reported that DSGi denied this. The Electroworld brand operates in Czech Republic, Greece, Hungary, Poland and Turkey. DSGi is also under pressure to sell its Italian UniEuro branches which have been consistently under-performing.

We’re not big business analysts but we know a sick pup when we see it. The problem in the UK is that DSGi has been too reliant on its high street presence and dominant branding to keep market share coasting over the past decade. The DSGi brand reputation among members on HUKD is definitely one of an old, slow, poorly serviced company with weak pricing. That’s not where you want to be positioned when your stock is sliding, your international brands are underperforming and hungry competitors are about to storm the gates.

On May 15, 2008 DSGi announced a Transformation and Renewal Programme which is supposed to address their weaknesses and re-organise the group.

So here’s the question for anyone who has dealt with DSGi and wants to pitch in suggestions to the comments. How would you fix DSGi?