The retailer posted an underlying pre-tax loss of£29.8 million for the six months to October 18, compared with a profit of£52.4 million in the comparable period last year.
Total sales rose 3 per cent to£3.47 billion in the period, but group like for likes plunged 7 per cent.
The core UK and Ireland electricals division in particular was hit by faltering consumer confidence and slipped from a profit of£14 million into an underlying operating loss of£22.3 million.
The retailer said: “The trading environment remains tough and volatile. The group is preparing for a recessionary environment and is consequently focused on cash generation.
“This includes reducing costs, optimising money margin and tight stock control, while continuing to deliver on the renewal and transformation plan.”
Chief executive John Browett maintained “rapid progress” is being made on improving the business. He said: “Although early days, the performance of the new format stores and improved service model gives us confidence for the future.”
Broker Seymour Pierce said DSGi’s interim performance was better than some had feared but cautioned: “The main concern is that the company now has a net debt balance of£149 million, predominantly because of weaker results and restructuring.”
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