The owner of electrical retailers Dixons, Currys and PC World said a "significant" fraud at a Paris warehouse would wipe out the profit contribution from its new businesses division this fiscal year.
"French police are investigating, and several operatives at the warehouse and external individuals have been arrested," British firm DSG International said today.
Seymour Pierce analyst Richard Ratner said the fraud at the Fotovista warehouse would cost DSG a one-off £10 million.
DSG also announced it was selling Fotovista's photography business for around £15.2 million.
Numis, which had pencilled in a profit of around £9 million at Fotovista, said it was reducing its full-year profit forecast for DSG to £297 million from £319 million, to reflect the fraud impact as well as its lower expectations for PC World.
Shares in the company were down 1.2 per cent at 168 pence in early trading, valuing DSG at around £3.1 billion.