* To exit loss-making Spanish operations
* Closure of 43 stores will cost about 30 mln euros
* Shares up 12 pct
By Paul Sandle
LONDON, April 4 Electrical goods retailer Darty
is closing its loss-making operations in Spain as part
of a turnaround plan centred on its profitable businesses in
France, Belgium and the Netherlands.
The company, which trails Media-Saturn and Dixons
Retail by sales in Europe, said on Thursday that its 43
stores in Spain would close in June. The closures represent less
than 10 percent of Darty's total stores in Europe.
The group, which in 2012 sold its stores in Italy and in
Britain, where it traded as Comet, said it had concluded that
increasing the scale of its Spanish business to a level where it
could become profitable would take too long and was too risky.
Shares in Darty, which has more than 450 stores in Europe,
were up 12 percent to 47.8 pence by 1140 GMT, the highest in
more than three weeks.
Retail sales in Spain have fallen year-on-year for 32
straight months to February, as high unemployment, wide-ranging
austerity measures and five years of tumbling property prices
battered consumer sentiment.
A 3 percentage point increase in value-added tax last
September further dampened domestic demand, especially for large
purchases such as washing machines and refrigerators.
Rival Dixons closed all of its 34 PC City stores in Spain in
Darty warned in February that if trading did not improve
across all of its operations, underlying pretax profit would
fall short of 30 million euros, which was the low end of analyst
expectations at the time.
Activist investor Knight Vinke, which obtained a place on
Darty's board earlier in the year, has also been pushing the
company to accelerate the pace of change, including eliminating
Analysts at N+1 Singer said it was a sorry end to a saga
that started when previous management acquired a chain of stores
in Spain shortly before the financial crisis at a reasonably
Including the cost of closing the shops, which Darty put at
about 30 million euros ($38.5 million), the analysts estimated
that the company had burnt through 300 million euros in the
"We regard the decision to close it down as long overdue,"
The stores in Spain were expected to record a retail loss
for the year to 30 April 2013 of about 16 million euros on
revenue of about 120 million euros, the company said.