Retailer DSG sees no market recovery before 2010

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"We are not expecting a quick recovery," Chief Executive John Browett told reporters on Wednesday. DSG trades as Currys and PC World, Elkjop in the Nordic region and UniEuro in Italy.

"From what we can see from customers they are taking to heart the credit crunch and therefore I think it's going to be quite a while before we'll see anything from the market which helps us. Certainly we don't see any recovery this year or next year," he said.

Shares in DSG fell as much as 6.2 percent in early trading. But by 2:34 p.m., they had recovered to trade up 4.3 percent at 55 pence, as some analysts raised hopes that Browett's three-year turnaround plan, unveiled in May, might bear fruit and as short positions were squeezed.

"He gave a clear impression of having got on top of the business operationally and that some of the work on improving the customer proposition is beginning to give reason for optimism," Morgan Stanley analysts said of Browett's performance on a conference call.

Like-for-like sales in the 16 weeks to August 23 fell 7 percent on the same period last year, led by 12 percent declines in its computing and southern European operations, DSG said ahead of its annual shareholder meeting.

Analysts had forecast a fall of between 4 percent and 8 percent.

Gross margin, a measure of profitability, fell 0.75 percent.

"This is a pretty dire trading update that highlights how tough things are out there," Kaupthing analysts said in a note.

Many European retailers are struggling as shoppers curb spending to cope with higher food, fuel and mortgage costs.

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