High street electronics retailers have a variety of headwinds to contend with. Amazon (US:AMZN) and ecommerce peers pose intense competition. Chunky leases are a drag on performance. Margins are low and tough to maintain. Revenues were hit by pandemic store closures, and the cost of living crisis is a fresh headache for companies flogging relatively expensive, discretionary items.
IC TIP:
Buy
Tip style
Value
Risk rating
Medium
Timescale
Medium Term
Bull points
- Takeover interest
- Improved trading
- Brighter outlook for consumer spending
- Cheaper than rivals
Bear points
- Balance sheet concerns
- Sales expected to fall in the short term
- Market share losses
On top of this, omnichannel retailer Currys (CURY), which sells products such as mobile phones, fridges, televisions and washing machines, has been dealing with the fallout from its unwise merger with Carphone Warehouse in 2014, with the latter’s standalone stores forced to close in 2020 as a result of the changing mobile market.