Dixons dogged by French unit problems Problems at its Pixmania arm in France have helped to push Dixons Retail into an £80m first-half pre-tax loss. The retailer of electronic goods was obliged to take a £45m charge after weaker than expected trading at Pixmania during the six-month period. The charge related to a total writedown of Pixmania's goodwill, the optimistic asset created when the price of an acquisition exceeds the value of the target's net identifiable assets. To clear the way for drastic remedial action at Pixmania, Dixons in August bought a 22 per cent stake held by the founders of the French electricals website for €10m, increasing its own holding to 99 per cent and giving it full day-to-day control. The British company is now consulting with French employees on measures to shrink the unit, which made a £17m first-half underlying loss. Sebastian James, Dixons Retail chief executive, said Pixmania had been losing out to French competitors Darty and Fnac. "The first priority at Pixmania is [to] stop the bleeding," Mr James said. Although it was too early to say how many jobs would be lost, he said the plan being discussed with staff covered a quarter of its cost base. For the 24 weeks to October 13, Dixons reported sales of £3.29bn, broadly the same as the same period a year earlier. Like-for-like sales, a measure that excludes new store openings, rose 3 per cent as strong trading momentum from summer sporting events eased in August and September. The £80m pre-tax loss compared with a £2.4m profit a year earlier. On an underlying basis that strips out the goodwill impairment and other items, the loss was £22m, compared with a loss of £25m. Dixons posted a £5.6m underlying profit in the UK and Ireland. Mr James said it was too early to say how Dixons would be affected by the cut-price sale of stock at Comet, its failed rival. "My feeling is we will get a good sense in the fourth quarter of what the long-term impact of Comet will be," he said. Across the group, the diluted loss per share was 2.5p, compared with a 4.3p loss a year earlier. No interim dividend has been proposed. Shares in Dixons fell 1.9 per cent to 25.55p in morning trading in London on Thursday. They have more than doubled over the past year. Kingfisher, the home improvement retailer, posted third-quarter retail profit of £257m, a year-on-year decline of 6 per cent. Retail profit is a measure of operating profit. The fall reflected adverse currency fluctuations and challenging markets. Shares in the group fell 1.5 per cent to 276.3p in morning trading.