DSG International, owner of Currys and PC World, is shutting down nearly a third of its troubled Italian operation ahead of the new chief executive's first review of the retail group.

The company, which has warned on profits twice in four months, announced that it will close around 40 of its 150 Italian stores over two years. The move will affect nearly 100 staff at the stores which trade as UniEuro. A DSG spokeswoman refused to comment on how much the process will cost the company.

The closure is the first action John Browett has taken to stabilise profitability at DSG since he joined the company from Tesco.com three weeks before the crucial Christmas season.

Mr Browett will announce the first phase of a business review on May 15, where it is hoped he will outline plans to turnaround the business which has been dogged by falling sales of computers and electrical goods, exacerbated by consumers cutting back on spending as mortgages, fuel and food costs rise.

In its most recent profit warning at the beginning of the month, DSG said trading in Italy "remains disappointing, not helped by the difficult economic environment". During the first six months of the year, Italian like-for-like sales, which strip out revenue from new stores opened during the reporting period, fell by 8 per cent.

On the closures, DSG said: "The company has informed the staff concerned and is working with the unions to review each store on a case by case basis."

In January, one of Mr Browett's first significant moves as DSG's new chief executive was to appoint Mario Maiocchi, previously the managing director of Metro Cash and Carry, to lead its Italian operation.

At the time, Per Bjorgas, managing director at DSG's electricals division, said: "[Mr Maiocchi] brings with him financial acumen, as well as marketing and business expertise, all of which will greatly benefit out operations in Italy.

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