DSG International, the owner of Currys and PC World, is pinning its hopes on Christmas and the January sales to reignite trade in expensive white goods and stem its falling profits. However, it admitted yesterday that it was cautious about consumer spending next year.

The electrical and computing group, whose new chief executive John Browett will take the helm next Thursday, reported a 25.4 per cent slump in underlying pretax profits to £52.4 million for the six months to October 13.

Profits for DSG’s computing division fell sharply, down 75 per cent to £5.9 million, after the company was swamped by an oversupply of laptops installed with Vista, Microsoft’s latest operating system, and a lack of demand from customers.

DSG said that laptop stocks were back to normal, but it was concerned about sales of large white goods such as fridges. Turnover fell by “single digits” during October and November.

The company said: “Having shown signs of stability, the white goods market is now more subdued.”

Its assessment of spending on white goods, which serves as a barometer of consumer confidence in the economy, is in line with that of Comet, its rival, which reported a slowdown in third-quarter sales because of falling demand for fridges, freezers and washing machines. Kesa Electricals, Comet’s owner, said that like-for-like sales, which strip out gains from new stores opened in the three months to October 31 fell by 0.2 per cent.

Slower sales of white goods also adds to growing evidence that the housing market is showing more signs of a slowdown, as shoppers are more likely to splash out on a new fridge, for example, when moving house.

Kevin O’Byrne, the finance director of DSG, said that the company was “cautiously optimistic” and “well-prepared” for Christmas. He said that it was difficult to predict how consumers would spend in 2008 because of the impact of rising interest rates, which have increased five times since August last year to 5.75 per cent, a slowdown in British housing and the influence of the global credit crunch.

Jose Marco-Tobares, an analyst at Numis Securities, said: “The main risk is that the consumer environment for big ticket items worsens from here.”

However, sales of televisions continue to thrive and Mr O’Byrne does not expect England’s failure to qualify for football’s European championship next year to affect sales.

DSG estimates that only 30 per cent of UK homes own a flatscreen television and believes that shoppers are showing signs of upgrading their existing sets.

John Browett, the former chief executive of Tesco.com, is joining DSG with less than three weeks to go before Christmas. His appointment as successor to John Clare was announced in June, but Tesco made him serve his full notice period.

As well as steering DSG through the Christmas and January period, Mr Browett will also have to stabilise underperforming areas of the business, specifically in Italy, where increased competition and fewer customers resulted in an 8 per cent fall in like-for-like sales during the interim.

DSG trades from 127 UniEuro stores in Italy, where there are about four companies in the electrical and computing market that each have between 5 and 7 per cent of the market.

Mr O’Byrne said that he expected consolidation in Italy. DSG would not be making acquisitions, he said, but would close underperforming stores and open sites in better locations. He declined to comment on whether he thought that Mr Browett would want to abandon the Italian business. “Anything is possible with a new chief executive,” Mr O’Byrne said.

Overall sales at DSG rose by 8 per cent to £3.3 billion and like-for-like trading increased by 5 per cent, with sales in its electricals division up 7 per cent to £2.2 billion and turnover in computing rising only 1 per cent to £900.6 million.

Shares in DSG rose from 112½p to 114½p yesterday.

DSG will maintain its interim dividend at 2.02p per share.

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