The Dixons Group has revealed that it will close 106 of its Dixons stores in the UK, as a result of disappointing sales.

The stores will close over the next three months at a cost of about £48m.

The 106 stores represent two per cent of the group's UK trading space in the UK, leaving it with a total of 214 stores. Dixons Group also owns PC World, the Link and Currys.

"Overall group performance is in good shape, and the outcome of the year will be in line with expectations," said Dixons representative Hamish Thompson.

"We have been looking at the Dixons format for a long time and we are experimenting with different environments, such as combining them to make larger stores.

"Despite a programme of investment, it was necessary to close these stores because they were unprofitable. The cost of running a high-street store has risen hugely, in terms of rents, logistical complexities and price deflation in IT and electronics.

"We fully expect to redeploy a significant number of employees. There is a Link, Curry's or PC World within a five-mile radius of the closing stores, and no one has been served a notice of redundancy yet."

Analysts have claimed that stiff competition from online resellers and supermarket chains is putting pressure on the high-street stalwarts.

James Governor, principal analyst at RedMonk, said: "Tesco is changing the face of electronics retailing; its recent results included good sales of consumer electronics components. Amazon also posted outstanding UK results, so it looks like Amazon plus Tesco equals trouble for the traditional retail sector."

Rachel Power, analyst at Canalys.com, said: "Dixons results weren't as strong as it was expecting, and it is struggling with the competition from online resellers and supermarket chains, which often offer items at cheaper prices."

sara_driscoll@vnu.co.uk