THE gloom surrounding the stricken retail sector will intensify this week when Currys owner DSG International plunges into the red at the half-year stage for the first time in more than two decades and scraps its interim-dividend payment.

The City expects Europe’s second-largest electricals retailer will post losses of between £25m and £35m on Thursday – compared with a pretax profit of £52.4m for the same period last year.

Shares in DSG, which operates 1,200 shops and online stores in 28 countries, have slumped by 90% during the past year, following a sharp fall in demand for big-ticket purchases and fears over the entry of US rival Best Buy to the UK market. DSG has also been hit by the withdrawal of credit insurance for its suppliers over fears it may be unable to pay for goods and services.

However, the company is expected to reassure on its financial position next week. Analysts at Credit Suisse said that sales would need to fall by 15%-20% in the second half of the financial year for the company to come close to fully utilising its £400m credit facility.

Separately DIY giant Kingfisher is expected to report that sales at its B&Q chain have fallen by more than 6% in the third quarter as the housing slump savages consumer spending.

The pain at the heart of the retail sector is claiming an increasing number of casualties. This weekend it emerged that Icelandic investment group Lagerinn has put national homewares chain The Pier up for sale.

It is believed that Lagerinn hired advisers at Argyll Partners to carry out a strategic review of its investment in The Pier earlier this year. It is now trying to dispose of the 48-strong chain, founded in 1989, which has been hit by the consumer downturn. Icelandic bank Landsbanki provided £15m of debt to the business.

The chain, which also has stores in Iceland and Latvia, specialises in handcrafted furniture from around the globe.

The turn of events comes days before a memorial in honour of the chain’s late founder Alison Richards at London’s Barbican Centre on December 2. She died a year ago following a battle with cancer.

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