Crispin Odey urges Currys to ‘make washing machines more expensive’

Currys is under pressure to call a truce with online rival AO World and “make washing machines and fridges much more expensive” in a fresh blow to already stretched household budgets.

Crispin Odey, whose eponymous hedge funds owning large stakes in both retailers, wants Currys to ditch its “price lock” commitment and make more expensive goods.

Mr Odey said: “Freezers, machine washings and electronic goods are going to have to be more expensive as they are currently being kept artificially low by the two of the predominant market players — Currys and AO World.”

The comments are likely to put the veteran City investor on a collision course with Currys chief executive Alex Baldock, who promised to increase the number of products captured by a price freeze.

“Our grip on costs and our strong relationships with suppliers will allow us to manage inflationary headwinds and keep amazing technology within reach of everyone,” Mr Baldock said.

AO World, the online specialist set up by Bolton multi-millionaire John Roberts, took the stock market by storm when it floated in 2017, impressing the City by undercutting bricks and mortar rivals.

However, shares have fallen by around 80pc over the last year as a growing number of warranty cancellations put pressure on its profits. AO World was forced to raise £40m from investors earlier this month in a move that coincided with one of the company’s credit insurers “rebasing” its cover.

Mr Odey said: “The price war between Currys and AO World is not benefiting either company. With profit margins at just 20pc, neither is going to make any money – which is not good news for shareholders.

“We say that it is time for a truce to be called. Given their market dominance, increasing prices is not going to reduce demand. Currys, which I hold a substantial stake in, needs to re-establish its profit margins. If AO World does not follow, so be it. But the company has recently been forced to prop up its finances by asking shareholders for money – so it is patently not a sustainable model for AO either.”

Mr Odey is one of the City’s best-known investors, coming to prominence during the financial crisis by betting against the value of banking shares. A supporter of Brexit, he claimed that he made £220m speculating that markets would fall in the aftermath of the EU referendum.

One industry source questioned the logic in Mr Odey’s remarks. “Why would Currys take their foot off, when its competitor is struggling?” they said.

A spokesman for AO World said: “AO customers know they will always be offered a great selection of products at great prices, all delivered with market-beating levels of customer service. We have a transparent price strategy and our commitment to value is unchanged.

“The rationale for the Placing was made very clear and the level of support we received from our investors represented a strong endorsement of our strategy. We see significant long-term growth opportunities for AO in the UK and, as stated at the time, the Placing will help us to realise them.”

Currys declined to comment.


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