Electricals retailer Dixons Carphone is to close airport store business Dixons Travel after it was hammered by the pandemic and the end of tax-free tourist shopping.

Shares in the PC World owner slid after it revealed plans to shut the 35-shop business.

A Dixons Travel shop (Dixons/PA)

It told investors that it does not expect passenger numbers to “sufficiently compensate for the removal of airside tax-free shopping”, which was introduced by the Government at the start of the year.

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“This has led to the difficult decision to close this business, which historically made an annual profit contribution of over £20 million,” the company added.

The group said that around 400 staff at Dixons Travel have been offered jobs in other areas of the business.

In an update to the stock market, the company also said that it has now reimbursed the Government with the £73 million in furlough support it claimed following the impact of Covid-19.

Dixons Carphone said it has also paid all of the £144 million in VAT deferred by the Government in the past year.

Sales in 2021 have “remained strong” despite the third national lockdown, the company said in the update.

It said that group revenues saw like-for-like growth of 12% in the 25-week period of April 24, driven by 14% growth in its international business.

Meanwhile, its UK & Ireland electricals operations delivered 11% like-for-like sales growth.

This was boosted by “very strong online growth”, with group electricals online sales more-than-doubling to £4.5 billion for the year.

Shares in the company were 4.1% lower at 150.8p in early trading.