Dixons vows to ‘stick to what we know’ after Pixmania sale
Friday 27 September 2013
Sebastian James, the boss of Currys and PC World owner, Dixons, has decided to stick to the High Street in the future after the sale of its loss-making online-only business Pixmania came a step closer.
He said: “What we’ve learned is we win when we do what we know, which is working as a multichannel retailer and as the market leader or a strong number two.
“Pixmania was neither of those things. While it has lots of assets, it’s not our cup of tea and not what we do. We will stick to what we know and leave online-only to others.”
A deal to offload the French business to German restructuring specialist Mutares AG is now just months away after it was signed off by workers unions. However, the deal will cost Dixons £59 million for future development of the online electrical retailer, which trades in 14 countries, bringing the total cost of the misadventure to around £250 million since bought in 2006.
The city appeared pleased with the deal as shares hit a five-year high, and James was equally happy.
He added: “We’ve done a deal that we are sure means Pixmania has got many years of fuel left in the tank to continue.
“It would have been a real shame to shut any operation down and see it disappear, so this is the best deal for everyone.”
The scale of the Pixmania problem was laid bare this year as losses more than doubled to £31.3 million and like-for-like sales fell 28% in the three months to end of July.
James explained: “You had a perfect storm in the economy, the company was exposed to a falling camera market and the Eurozone was struggling. As a pure play business it was also up against very aggressive land grabs by Amazon. Multichannel players also started waking up and the competition was too great.”
The deal should be completed in December. Dixons has already sold its struggling Turkish operations this year. All eyes are now on Italy, although James said a sale there was not a certainty.
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