Dixons Retail bids adiós to Spain as it shuts up shop after 10 years

Dixons Retail today announced its decision to quit Spain at a cost of £30 million after 10 unhappy years on the Iberian Peninsula.

The group runs 34 PC City shops and a website in Spain which concentrate solely on the computing market. It employs just over 1360 people in the country.

Dixons declined to say how much money it had lost in Spain over the last decade, but in its trading updates for the last three years it has been warning how tough conditions had become there.

It said the closure is expected to take place by the end of this summer, but predicted that doing so would help boost its trading profit by around £5 million a year.

Chief executive John Browett suggested the exit from Spain when Dixons issued its second profits warning this year last month, saying trading had not improved since Christmas. Same-store sale across the group had fallen 11% in the 11 weeks to the end of March, it said.

Sources close to the company said Dixons is not looking at pulling out of either Greece or Italy despite those countries suffering from similar tough consumer trading.

In both countries the group has gone for the format of selling electrical goods alongside computers.

Dixons has a strong market share in Greece with a well-recognised brand, while its recent trading statement said the Italian turnaround is progressing faster than expected.

The group recently described its joint venture in Turkey as a "long-term opportunity."

Browett also outlined further cost cutting and cash generating plans alongside last month's profit warning.

Dixons shares, which stood at 35p a year ago, were unchanged at 12.2p today. Analysts now question if both its Currys chain and Kesa's Comet can exist together in the UK.