DSG International, the group behind Currys and PC World, is to halve its dividend and close 77 Currys stores as part of a turnaround programme that is designed to reinvigorate the electrical goods retailer.

John Browett, the chief executive who joined DSG from Tesco in December, has also said that he will remove £50 million of costs from the business this year by axing job duplication and head office inefficiencies. The axe is expected to fall on approximately one in four jobs at head office initially but Mr Browett refused to confirm the number of redundancies while consultation with staff was on-going. It is thought that up to 400 head office workers could lose their jobs.

The company said it would write down £395 million of assets in the current financial year, the bulk of which relates to the goodwill paid to buy the group's struggling Italian business, where 40 stores are going to close over the next two years.

The five-point revival plan will see DSG spend an additional £110 million of capital expenditure over the next three years, as it begins refitting and refurbishing its shops in the UK and Italy. Europe's biggest internet retailer will also concentrate on growing its market share of the fast-growing internet electricals market.

Mr Browett said: "DSGi has many inherent strengths...However it has not kept pace with its core customer needs, particularly in the UK. We will focus the business on delivering an unbeatable combination of value, choice and service for our customers. This includes helping our customers with complete solutions such as connectivity, delivery, installation, repair and converging technology."

The chief executive said that his plans for the business had not been modified in the light of the arrival on these shores of Best Buy, the US electronics giant which last week announced a partnership with Carphone Warehouse.

"The plan has not changed but it will encourage the business to go faster. The prospect of increased competition is often very helpful in encouraging change," he said.

Mr Browett also denied that he was merely patching the business up to sell it. "I see a fantastic position for a specialist electrical retailer. I did not come here to do a quick fix and flip the business,” he said.

DSG has been one of the major casualties of the recent consumer slow down and has issued two profit warnings this year, the first in January. The retailer, which has stores across Europe, has also suffered from mixed fortunes in its international division, which raises 40 per cent of group revenue.

The transformation plan is expected to have a 3 to 4 per cent return on sales in the medium term.

A final dividend of 3.43p will be paid, compared with 6.85p last year, making a total for the year of 5.45p.

DSG said it expected to recommend a dividend of 4.44p for the 2008/09 financial year, compared with 8.87p for the year to April 30 2007.

Trials of new store formats for the UK are to be put in place for this Christmas with potential roll out across the UK business after that. A new store format for PC World has already been developed and there are plans to refit at least 10 per cent of stores in time for this Christmas.

Currys.digital will in future focus on the latest portable technology, rather than a mix of traditional electrical and electronic goods according to the turnaround plan. White goods, small kitchen appliances and personal care products will be replaced by a larger range of laptops, televisions and other digital products.

Of Currys 177 stores, only 100 are deemed to be in attractive trading locations. The remainder will be closed as their leases expire, the company said, with the average lease having four to five years to run.

It said the trading environment remained very challenging, particularly in the UK, Italy and Spain.

In a separate trading statement, DSG said that total group sales for the 53 weeeks to 3 May 2008, were 8 per cent higher than the previous year. Like-for-like sales were up 1 per cent.

The company is expecting to see underlying pre-tax profits of £200 to £210 million this year.

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