24-7 gets up early to whip Dixons online

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A website launched only six weeks ago to sell electrical goods has already overtaken the online sales of Dixons.

A website launched only six weeks ago to sell electrical goods has already overtaken the online sales of Dixons.

It has been a bad week for Dixons, after its interim results revealed a drop in underlying sales, and its shares fell more than 7 per cent over the week.

But to add salt to the wound, the new website, 24-7electrical.co.uk, which began at the start of December, is producing sales of around £500,000 a week. In contrast, Dixon's entire internet division had average weekly sales of just £344,000 last year, including the online sales of Dixons, Currys, PC World and the mobile phone store The Link.

The rapid growth of 24-7 means it is projecting sales of £50m for the year, with a profit of £10m. Last year, Dixons' internet division had sales of just £17.9m and losses of £16m. The company has stopped reporting results from its internet division, and has integrated them in its total retail sales figures.

"All the other high street electrical retailers, who have been on the web for more than a year, are doing less business than us," says Simon Richards, the chief executive of 24-7. "We are delivering 300 parcels per day compared to our competitors, who can manage only 20 to 30."

He explains the initial success of the company by the low prices, achieved, he says, because of good relationships with manufacturers. The company also often sells end-of-line products, and promises to deliver any purchase within 48 hours, possible because it keeps all products in stock. Dixons.co.uk says it will deliver in between three and seven days, depending on the size of the item.

Based in a small office in Pimlico, central London, 24-7 is currently negotiating for a 10,000sq ft warehouse in north London, to cope with the demand.

The website uses technology called Venda, derived from the failed internet company Boo.com and commercialised by the technology entrepreneur Dan Wagner.

Last week Dixons reported half-year sales of £2.2bn and a fall in underlying profits of 3.7 per cent to £87.4m. It blamed the fall on poor sales of mobile phones and personal computers.

In total, the company is believed to have invested more than £20m in its internet division. The Venda technology at 24-7 costs the newcomer only £48,000 a year.