Sep. 2--PC World and Currys owner DSG International today reported a collapse in sales in Britain and sold its stores in Poland for just ?1.

Computing sales fell 15 percent at PC World in the UK and there was a 14 percent slump in the electricals division in the 16 weeks to 22 August as the firm was hit by the recession.

DSG also pulled out of Poland, selling its eight loss-making Electro World Poland stores for ?1, but said its overall sales decline eased over the summer helped by strong growth in the Nordic region.

Shares surged 7 percent or 2p to 29p having plunged below 15p in January.

The firm said group sales fell by a not as bad as feared 6 percent in the 16-week period compared with a 9 percent drop in the prior financial year.

"Given the challenging environment, this is an encouraging start to the year," said chief executive John Browett. "We remain cautious about the economic outlook."

Analysts said the decline in sales was better than the 7 percent to 11 percent expected in the City driven by a 9 percent rise in Scandinavia. The UK performance was in line with expectations.

Singer analyst Matthew McEachran said the results were "encouraging".

Browett blamed the 15 percent plunge in sales at PC World on "significantly lower" sales to businesses as a result of the recession.

A quarter of customers at PC World are small businesses, many of which have put spending on hold.

Sales of electrical goods were also down sharply in the UK as DSG struggled against tough comparisons with a year ago when TV prices were slashed to help it compete with the internet.

Efforts to revive sales have been blunted by the slowdown in consumer spending and rising unemployment, and the firm has braced investors for continued declines until 2011.

The CBI recently reported subdued sales on the UK high street over the summer as job losses limited the pace of economic recovery.

The British Retail Consortium last month called for a white goods scrappage scheme to boost consumer take-up of energy-efficient items from fridges to washing machines such as those sold by Currys.

But DSG said it was more optimistic about the economy than it was three or four months ago when the end of recession still looked a very long way off.

The firm raised £310.6 million from investors earlier this year to speed up its store revamp programme in the UK and it has now refitted 108 of its 700 outlets throughout Britain with another 60-80 to go before the end of the year.

The five-year transformation plan also includes greater product ranges and staff training.

DSG faced angry shareholders today at its annual meeting where investors were set to vote on a new "salary sacrifice" scheme for directors to replace 25 percent of their wages with share options for the current financial year. The scheme has provoked opposition from pension fund advisory group PIRC because it is not performance-related, although the plans looked set to win support from major shareholders at the meeting.

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