DSG, the Currys and PC World retailer, will slash its dividend and announce plans to close dozens of stores in the first phase of new chief executive John Browett’s plan to turn round the company.

Up to 200 of the chain’s 700 stores could go, while dozens more will be converted to accommodate both the Currys and PC World brands under one roof.

Browett said DSG “has to get the UK operation right” and completely rethink its store formats.

DSG has already issued two profit warnings this year, and Browett warned that it could take years to turn the group round.

Analysts said DSG’s dividend may be cut by as much as 50% from 6.9p last year.

It will be the second retailer to take this action in as many months. In March, Kingfisher, which owns the B&Q DIY chain, halved its final dividend and pledged four years of transformation.

DSG has been hit by falling sales of computers and electrical goods and the increasing number of shoppers who use the internet to find a bargain.

Last week, the British Retail Consortium revealed steep price deflation in electrical goods, averaging 5.6% over the past year.

PC World has attracted most criticism, with analysts claiming it lacks direction, stocks confusing product ranges and suffers from an ageing format, while the standard of service has been a constant bugbear.

DSG has also had mixed fortunes in its international operations, which accounted for 41% of last year’s revenues. Although the Scandinavian retailer Elkjop proved to be a wise investment, PC City, a PC World-style format developed for France, was closed last year after suffering losses.

Last month, Browett announced that 40 of DSG’s 150 Italian stores would be closed over two years. However, when Browett outlines his plans on Thursday, his vision for the UK store network will be key. A number of new formats are under consideration, including a plan to split the stores down the middle and bring together Currys and PC World.

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