Dell is back flogging its grey boxes at PC World after a three year hiatus.
Apparently Dell has reformed its relationship with Dixons Carphone, owner of the Currys and PC World.
Dell has been ramping up its retail presence and signed a deal with John Lewis to give it more of a presence on the high street. IT also improved its distribution links to Ensure.
What this means is that Curry PC world will flog the Dell XPS, Inspiron and Alienware ranges as well as some monitors. These are normally sold online using Dell’s famous direct model. It looks like the PC World move is designed to maximise the back to school buying period.
Alienware is already well known in gaming circles and it will now be given a chance to grow the brand in the largest high-street computing retailer.
Dell UK general manager, retail, consumer and small business, Jamil Nathoo said that having a significant player in the retail industry this relationship is key in giving customers the choice that they’re asking for.
“We’re excited to continue bringing innovative and high-performing technology to consumers on the high street,” he said.
Dixons Carphone is finding itself rather flush in the run up to Christmas, and might even be able to afford to buy its staff a celebratory mince pie.
The numbers for the period up to 31 October show revenue increased up five per cent year-on-year to £4.39 billion and up three percent on what was expected.
The company was formed last year from the merger of Dixons and Carphone Warehouse and it has seen its rivals suffer badly in the months that followed. Not so for Dixons Carphone.
UK and Ireland markets grew two percent to £2.87 billion and the Nordics edged up one percent to £1.19 billion. The only dark spot was Southern Europe fell six percent to £257 million, but this was related to the weakness of the Euro rather than sales problems.
CEO Sebastian James said the market was flat but his company saw like-for-like growth driven by market share gains across all territories.
The British stores saw cost and what Dixons Carphone claims were “synergy savings” when it closed the Dixons HQ in Hemel Hempstead. White goods offset a “fall in demand” for tablets and PCs. The mobile business mopped up some share, it said.
A “strong” Black Friday was a decent opening to the Christmas sales season, the CEO said.
DixCar made “progress” on “price-matching” against the local Nordics retailers but this, coupled with forex pressures, had “inevitably had some impact on margins” there.
Pre-tax profit was up 35 percent to £135 million, but after finance costs and losses from discontinued operations, net profit for the year was £86 million, compared with £46 million a year ago
Black Friday and Cyber Monday are a US sales tool which proves perfectly pointless for the UK channel and might die out.
Black Friday is a US retail sales event popularised by global giant Walmart but appeared to catch on in the UK. Commerce consultancy Salmon predicts that it will raise a £1 billion online shopping day in the UK.
But it is starting to look like it will come unstuck. Walmart-owned Asda recently announced it would not take part in the event this year after listening to customers’ views. Basically, no one wanted to see British people fighting in shops.
But vendors are started to suggest that the Black Friday numbers don’t stack up. They are losing 30 or 40 percent of their margin and are wondering if it is worth it.
Vendors like VIP are telling the press that in tech, where the margins are so slim, you’re going to end up with people saying ‘I don’t want to participate in it’ next year and the year after”.
The theory is that Amazon and Dixons will continue the tradition, but other major brands will give the sale a miss as they gingerly fondle their bruised bottom lines. After all they are taking money away from the busy period – Christmas, which is when many resellers make most of their cash.
Analyst Context’s founder Jeremy Davies agreed that the phenomenon could be on its way out. He said that the whole Black Friday thing will weaken next year because the experience has been negative.
Despite sales only rising marginally in its last financial year, Dixons showed pre-tax profits of £133 million up to the end of April. That’s a rise of 53 percent compared to the pre-tax profits of £86.6 million in the year before.
The profit bump comes as it prepares to merge with Carphone Warehouse – it also showed significantly larger pre-tax profits for its financial year. The European Commission said yesterday that it had approved the merger.
Part of Dixons’ profitability comes down to the fact that it sold what it describes as “non core” units during the period. It also cut costs by £45 million in the period.
Sebastian James, Dixons’ Group’s CEO, said that the company is in “robust financial health”. He said he’s excited about the Carphone Warehuse merger.
An anticipated deal between Dixons Retail and Carphone Warehouse became reality today and is set to change the face of many high streets.
The deal, worth an estimated £3.5 billion, will mean the creation of a 50/50 owned entity which will be renamed Dixons Carphone.
Dixons has over 500 PC World and Currys stories in the British Isles, while Carphone Warehouse own over 2,000 stories across Europe.
Dixons said there would be some minor job cuts after the merger but Carphone Warehouse said there will be more jobs available.
Paul Heywood, director of Dyn in Europe thinks that customers are going to demand a good experience as a result of the merger. But he warned that the shops will have to work together fast to exploit the market, reduce costs and provide good customer support.
UK IT services provider Kelway is picking up the IT business, Equanet, from Dixons Retail.
Equanet, Kelway says, has an established presence in the North of England and the buy will help it expand its customer base. At first, Equanet will operate as its own brand within the larger group, though will trade on integrated systems.
Dixons will carry on operating the PC World Business service for small businesses.
Kelway says that Equanet is noted for its e commerce platform, which will now fit in with Kelway’s ServiceTrack offering for online order management. By combining both, Kelway hopes that it can offer a unique experience towards its customers.
Kelway will also offer its ServiceWorks cloud services to Equanet’s clients.
In a statement, Sebastian James, chief exec of Dixons Retail, said that the two complement each other “extremely well” and he expects the transaction will help “Equanet to flourish in the specialist B2B market”.