BT buys online electrical retailer

Telecoms giant BT went into battle with Dixons in cyberspace today by snapping up an online retailer of electrical products for a mooted £30 million.

BT said the purchase of dabs.com, which sells around 15,000 products and processes about 75,000 customer orders a month, would allow it to harness services including broadband to physical sales of hardware such as laptops and PCs.

The deal brings a windfall to David Atherton who has retained sole control of Bolton-based dabs since he founded it in 1990 as a mail order reseller.

The business moved online during the dotcom boom and now has more than a million registered online customers in the UK, with revenues totalling £180 million last year and gross assets of £42 million. It employs more than 200 people and also has a small operation in France.

Ian Livingston, chief executive of BT Retail, said: "Dabs is a dotcom success story and one of the best companies in its field."

The push by BT into online retailing puts it in direct competition with Dixons after its parent decided earlier this month that the 70-year-old brand would disappear from the high street to trade exclusively online.

Evolution Securities analyst Nick Bubb believed Dixons had looked at dabs.com in recent weeks and opted instead to spend 266 million euros (£185 million) on a controlling 75% interest in Paris-based Fotovista Group, which sells digital photographic and consumer electronic products online.

He added: "Clearly if dabs was that compelling then Dixons would have bought it."

The strategic move by BT was not a shock because Mr Livingston is a former finance director of Dixons and would have in-depth knowledge of the market for electrical products, he added.

Mr Livingston said: "Dabs.com's outstanding expertise will boost BT's online power to sell innovative, value-for-money, communication and converged IT products and offer great service to a wide range of customers.

"This purchase strengthens our online IT and digital products sales and service presence for small and medium-sized businesses as well as for consumer customers."

Dabs.com sells computers, games consoles such as the hand-held Sony PSP, camcorders, digital cameras, satellite navigation systems and modems.

Products that BT intends to sell through dabs.com include BT Fusion, which allows people to have a mobile phone that makes calls over a landline, while there was also the prospect of TV over broadband from this autumn.