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Dixons Retail is selling off its loss-making operations after posting a four per cent rise in like-for-like sales.
The firm, which owns PC World and Currys, has received an offer for online tech retail store Pixmania from German holding company Mutares AG. Pixmania like-for-like sales fell 28 per cent during the first quarter ending July 31st 2013.
Under the terms of the offer, Dixons would provide around €69 million in cash to support Mutares’ plan and for the ongoing funding of the business.
Dixons Retail has also agreed to sell its ElectroWorld retail operations in Turkey to electrical specialist retailer Bimeks. It expects to receive £2 million in cash over two years from Bimek.
ElectroWorld generated retail operating losses of £9 million for the year to April 2013.
The news comes as Dixons Retail posts its financial results for the three months ending July 31st, with its annual general meeting taking place today.
Its multi-channel businesses in the UK and Ireland, Northern and Southern Europe delivered performances "in line with expectations" with like for like sales up four per cent.
Group gross margins dipped 0.4 per cent during the first quarter.
Sebastian James, Dixons Retail’s Chief Executive, said: "Against some very good comparables last year, and despite a July that was sizzling in the North and chilly in the South (affecting electronics and air conditioning sales respectively for that month) we have had an encouraging start to the year.
"We are continuing to improve our proposition for our customers. We are the first to offer same-day delivery across our product range to many of our customers in the UK, our multi-channel proposition is getting easier to use, we have further improved our customer advocacy results, and our pricing is ever sharper.
“In order to succeed as a pure play e-tailer, Pixmania needs a different kind of entrepreneurial vigour. I am therefore delighted that we have found a potential solution that offers the prospect of a good future for Pixmania outside the Group.
"I am also pleased that we have agreed the sale of our ElectroWorld operations in Turkey to Bimeks, one of the leading electrical specialist retailers in Turkey. I have long believed that the Turkish electrical market has been ripe for consolidation and this agreement will enable ElectroWorld to flourish, as part of the Bimeks group in Turkey.
He added: "Despite some reports of improved economic conditions, we remain cautious on the state of the market for the year ahead. But with this good start, I am excited about the rest of the year and about the future for a successful and simplified Group.”
Murat Akgiray, founder and chairman of Bimeks, commented: "We are very pleased with this deal as the ElectroWorld business is a great fit with our stores and reinforces our market leading position in Turkey. Our multi-channel strategy is based on fast and sustainable growth with an evenly positioned geographical spread across Turkey. This transaction is a significant step in achieving our targets and driving the performance of Bimeks.”
Aurélien Fauvel, head of Mutares France, added: "We firmly believe Pixmania has a fundamentally strong business that can achieve long term success in its markets and we look forward to discussing our future plans with the employees and stakeholders.”
