DSG International , Europe's No. 2 electricals retailer, met forecasts for first-quarter sales with trade boosted by strong demand for TVs to watch the soccer World Cup and for Apple iPads.

DSG, which runs the Currys and PC World chains in Britain, UniEuro in Italy, Elkjop in Nordic countries and Kotsovolos in Greece, said on Thursday it was wary about the economic outlook, but was well positioned.

Shares in the firm have lost 10 percent of their value over the last month on fears about the strength of consumer spending, underperforming the British general retailers index <.FTASX5370> by 6 percent.

Many of Europe's retailers are still struggling with consumers reluctant to spend amid fears that taxes and unemployment will rise as governments take action to reduce their deficits.

DSG said sales at stores open over a year rose 3 percent in the 12 weeks to July 24, compared with analysts' forecasts of a rise of 2-4 percent.

Gross margins across the group were up 0.1 percent.

Our UK businesses performed particularly well, most notably with customers responding to our strong World Cup promotion, said DSG.

Like-for-like sales were up 6 percent in Britain and Ireland, where the firm gained market share, and flat in the Nordics.

DSG said its store refit programme was on track with 200 stores now reformatted in Britain.

The firm is just over two years into a turnaround plan that has focussed on selling underperforming businesses, cutting costs, revamping stores, opening larger stores and improving product ranges and customer service.

Although survey on Tuesday said British consumer confidence unexpectedly improved in August for the first time since February, many experts say shoppers are in for a particularly tough winter as government cuts and tax rises bite.

DSG investors are also concerned about competition from supermarkets and pure play Internet retailers and the arrival in Britain of U.S. electricals market leader Best Buy .

Best Buy, through its joint venture with Carphone Warehouse , has so far opened three electrical goods megastores in Britain and has said it could build a chain of up to 100 shops to challenge DSG and Kesa Electricals , the owner of Comet.

Shares in DSG closed at 24 pence on Wednesday, valuing the business at 870 million pounds.

(Editing by Mark Potter and Erica Billingham)

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