DSGI's chief Clare suprises with resignation

DSG International Chief Executive John Clare surprised investors on Thursday with the announcement he will retire in early September, lifting shares in Europe's biggest specialist electricals retailer.

"The board has a process in place for the appointment of a new chief executive and will make an announcement on that appointment shortly," owner of the Currys and PC World brands with stores in 27 countries said in a statement.

Clare will retire on September 5 at the annual shareholder's meeting after 13 years as CEO. His decision follows a difficult year with DSGI's Italian business underperforming and repeated speculation the group is vulnerable to private equity.

It also comes amid a shake up in the electricals sector, with smaller rival Kesa Electricals reported this week to be looking for a new CEO. Analysts thought it unlikely Kesa's Jean-Noel Labroue, who is older than Clare, would take his job.

A DSGI spokesman reiterated Clare's early retirement was entirely his own decision. "There has not been any outside pressure from shareholders or major institutions and I can categorically say there has been no boardroom row," he said.

DSGI shares rose as much as 2.3 percent to 173 pence outperforming a flat DJ Stoxx index of European retailers <.SXRP> on news of the departure, having shed 14 percent of their value in the past six months.

"It's time for a change. I think he's taken it as far as he can. It's a really competitive environment," Cantor Index analyst David Buik said.

Clare, who has steered DSGI's expansion into more than two dozen countries and the growth of a strong Internet sales business, said he felt it was time to pursue other interests.

He is widely applauded for pulling the Dixons brand out of the British high street and relaunching it as an Internet retailer, closing PC City stores in France and his acquisition of online retailer Fotovista and Scandinavia's Elkjop.

However, weakness at its Italian UniEuro business has overshadowed recent successes and institutional investors Goldman Sachs and Deutsche Bank have sold down stakes. DSGI said this month it would cut UniEuro's value in its books by up to 130 million pounds as it struggles with cut-price competition and changes to its centralised operating model.

Pali International's Nick Bubb believed Clare's replacement was more likely to be an internal candidate, like Finance Director Kevin O'Byrne, although WH Smith Chief Executive Kate Swann and Argos's Sarah Weller were possibilities.

The management shake up could also kindle private equity interest. "It will make people think about what the group is worth and its moving parts," he said.

DSGI reiterated its May 16 trading statement that operating profit for the year would be in line with current market expectations. It did not say what the expectations were. [via]