Currys to offload Greek retail after strategic review

• Currys has agreed to sell Kotsovlos to Public Power Corporation for £175m
• Founded in 1950, Kotsovolos operates 95 stores across Greece and Cyprus
• Proceeds from the sale will go towards paying down debts in the short term

Currys has struck a deal to sell its Kotsovolos retail business to the largest power generation company in Greece.

The electronics retailer launched a strategic review of its Greek division during the summer and concluded its brand strength, dominant market position, and long-term record of profitability were not demonstrated in the firm’s valuation.

It has now agreed to sell the division to Public Power Corporation for €200million (£175million), with proceeds in the short term going towards paying down debts.

Founded in 1950, Kotsovolos operates 95 stores across Greece and Cyprus, selling electrical goods and offering repair, recycling and installation services.

Around 85 per cent of Greek households have purchased a product from the firm in the past five years, according to Currys.

The Athens-based company formed a strategic partnership in 2000 with Dixons Group, which eventually bought a majority stake four years later.

Currys told investors the disposal would help enhance its balance sheet and create ‘greater flexibility’ to make further investments and improve shareholder returns.

It also said the move would streamline the business, given that Kotsovolos only contributed about 7 per cent of its total turnover last year and has ‘limited synergies’ with the wider group.

Following the disposal and peak trading, Currys intends to start talks about cutting its  pension fund’s accounting deficit, which stood at £249million in late April, as well as future pension contributions.

Alex Baldock, the firm’s chief executive, said the sale is ‘an excellent outcome for Currys and for our shareholders’, which recognises Kotsovolos’s value ‘and accelerates its realisation’.

He added: ‘As a group, we’re focused on maintaining our encouraging momentum in the UK&I and getting the Nordics back on track; this disposal will further strengthen the foundations on which we do both.’

For the 17 weeks to 26 August, Currys reported a 4 per cent drop in comparable turnover, with trading in Britain impacted by subdued demand for computers and a weak performance in May and June.

Revenue fell more steeply in the Nordics region, where profits have been dented by inflationary pressures and lower orders for electrical products amidst significant discounting by competitors.

Currys shares were 3.4 per cent higher at 47.5p on Friday morning, although they have still fallen by approximately 16 per cent since the year began.

Analysts at broker Liberum said: ‘If the share price persists at the current depressed level, then the group could attract an approach, as we are seeing across the UK consumer and retail space.’