LONDON (Bloomberg) - DSG International plc., the UK's largest electronics retailer, said it will reformat as many as 120 stores this year to revive sales, and shut more outlets to halt losses in Italy, fueling a 19 percent share price gain.

More than 50 stores have been revamped so far to make them easier to navigate, encourage shoppers to stay longer and offer a wider product range, Hemel Hempstead, England-based DSG said yesterday. Reformatted CurrysDigital outlets have earned as much as 40 percent more gross profit than unconverted stores, the company said, adding that it may spend as much as £155 million ($218 million) this year on refits and openings.

"These are phenomenal results and from my perspective a huge relief," CEO John Browett told journalists during a visit to a Currys Megastore in Birmingham, England. DSG plans to cut expenses by a further £50 million per year from 2010, on top of £95 million of cost reductions it achieved this year, he said.

Sales at DSG are sliding as the retailer braces for US electronics seller Best Buy Co.'s opening of British "big box" stores this year. After three years of declining profit, the owner of the Currys and PC World chains reported its first loss in at least 24 years in November and scrapped its dividend.

DSG gained 3.5 pence to 21.75 pence in London trading. Investec Securities analyst David Jeary yesterday raised his rating to "buy" from "hold", saying the company is not under "imminent financial threat" and could turn to options including a stock sale to raise cash if needed.

Spending on store refurbishments will be funded from cash and bank facilities, Mr. Browett said. The retailer's £400 million debt facility will be drawn to between £170 million and £200 million this year, he said.

Sales at the four CurrysDigital stores that have been remodeled to date rose 46 percent in the six weeks ended February 21, Mr. Browett said. A 10 percent revenue increase at the 41 refitted PC World stores lagged behind the company's 15 percent target because of product unavailability, he said.

"Management believes there remains a significant opportunity for productivity improvements," including more cost cuts in logistics and inventory, DSG said in a statement.

In Italy, DSG said it is ahead of its own store-closure schedule, with 43 outlets to be shut this year and a further 10 designated for closing. The retailer expects to use up cash of between 60 million euros ($76 million) and 75 million euros to get the unit back into profit over the next three years.

In Spain, DSG said there would be a "restructuring" of its PC City stores, which are expected to lose as much as £8 million a year during the recession.

The Spanish market has been "catastrophic", Mr. Browett said, adding that a sale of the unit is unlikely in the current climate. He sees same-store sales down 25 percent this year.

DSG shares have gained 24 percent this year after losing 82 percent of their value in 2008, pummeled by a decline in consumer spending and competition from Internet retailers.