Dixons and Carphone Warehouse merge, promise no shop closures

Carphone Warehouse and Dixons, owner of Currys and PC World, have officially confirmed their union in a £3.8 billion merger.

dixons-headphones.jpg
Currys and PC World are merging with Carphone Warehouse. Dixons Retail

Currys, PC World and Carphone Warehouse are coming together to form one high street-ruling gadget-flogging behemoth, as the merger of Dixons Carphone is officially confirmed.

Once approved by both sets of shareholders, the merger will see Carphone Warehouse and Dixons Retail -- the parent company of Currys and PC World -- become equal partners in the deal, set to be worth £3.8 billion.

Dixons Retail runs 500 technology shops across the UK, while there are more than 800 Carphone Warehouse phone shops in Britain and more than 2,000 around Europe.

Let's talk about that name: Dixons Carphone. Carphone Warehouse shops are called Phone House in Europe, so this is a missed opportunity to ditch that archaic "Carphone" reference.

Meanwhile, there hasn't actually been a branch of Dixons on the high street since 2006 -- which means the two companies have decided to retain the most obsolete parts of both their names for the new company. Good job, guys! I guess changing names is hard -- just ask Orange and T-Mobile, which united to form the ludicrously named Everything Everywhere, now known simply as EE.

It's not yet clear whether branches of Currys, PC World or Carphone Warehouse shops will be rebranded. Announcing the new merger, Dixons boss Sebastian James offered an assurance that the deal would not result in any shop closures -- in fact, Carphone Warehouse reckons it will actually grow by 4 percent. That will be offset by 2 percent job cuts for the new merged company, however, which it indicated would mainly be in its head office.

"Both Dixons and Carphone Warehouse are facing diminishing demand," says Professor of Practice Mark Skilton at Warwick Business School. "Buyers and consumers are increasingly being served by online marketplaces and branded online stores... The old world intermediaries like Dixons and Carphone Warehouse are offering less value in this digital ecosystem.

"Dixons and Carphone are right to pursue this strategy but it will require some deft management skills and product-partner strategies to make this a reality."

 

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