Once there was Dixons, Currys, Comet, Carphone Warehouse and PC World. Slowly Dixons took over them all, and the latest merger talks are concerning the merging of Dixons and Carphone Warehouse to create Dixons Carphone.
With electrical retail outlets becoming larger and fewer, more sales online and mobile phones being free of cars, I cannot help wondering why the new company is not called Dixons Warehouse.
There are over 500 Currys and PC World shops in the UK and Ireland and over 2,000 Carphone Warehouse shops across Europe. Carphone Warehouse was one of the first mobile phone shops to hit the high street – they arrived at a time when many people still felt that phones in cars was just a gimmick and mobile phones would never become popular.
Sebastian James – Dixons CEO
Sebastian James revealed the merger plans when he updates shareholders with Dixon’s trading performance for the past year.
Dixons has seen an increase in sales of around three per cent. This is in addition to the opening of new stores. Dixons profits are well within market expectations for the year and might even exceed them slightly.
Sebastian James’s Announcement
“Today we also announce that we are setting out on a new journey with Carphone Warehouse and it is good to be in such a strong position as we embark on this adventure.
“The ability to take what we have built in electrical retailing and add the profound expertise of Carphone Warehouse in connectivity would make us a leading force in retailing for a connected world.
“Together we can create a seamless experience for our customers that will enable technology to deliver what it promises – that is, to make their lives better.”
Dixons sells handsets and Carphone Warehouse mostly manages the deals with the mobile networks. The merger will give customers an easier way to buy the phone they want with the best deal for their needs.
More jobs for Carphone Warehouse
It is not often the mergers result in more jobs, but Carphone Warehouse has said that there would be “significant job creation” with an increase in staff of about four per cent.
Fewer jobs for Dixons
Dixons, on the other hand, expects to lose some jobs, maybe around two per cent of the work force.
Today’s share prices:
- Dixons Retail PLC(LON:DXNS): 47.95 p down -2.95 (-5.80%) at 11:57AM BST on 15th May 2014
- Carphone Warehouse Group PLC: 314.50 pm down -13.30 (-4.06%)
The news of the merger has resulted in a fall in share prices this morning, The news does not seem to be impressing shareholders and fund managers.
The merger deal is valued at around £3.8 billion.