Grabs 99 percent of loss making European retail site
Dixons has increased its stake in struggling online retailer Pixmania in a cash deal worth £8 million.
The hardware retailer announced today that it would buy up a further 22 percent share in Pixmania, taking its total to 99 percent. The remaining one percent will remain with French firm Club Fotovista, which is held by employees and former employees of Pixmania. Dixons acquired the original 77 percent stake back in 2006 for a fee of £185 million.
The online retailer, which currently trades in a large number of countries across Europe, has suffered from poor sales, and with an operating loss of around £20 million in the year up until April 2012. Dixons has also agreed to waive £4 million owed by the firm as part of the deal we sees it increase its stake to near total control.
Dixon’s CEO Sebastian James said in a statement that Pixmania is “at the heart” of its UK multi-channel business, and will endeavour to improve its financial position.
“I am pleased that we have been able to acquire substantially the remainder of the PIXmania business,” James said, warning that the online retailer continues to face “strong market headwinds”.
A multichannel approach is increasingly seen as a vital way to survive in a tough economic climate sales climate, with retailers having to fight the scale of sales that behemoths like Amazon can rely on.
Dixon’s itself has been reducing its physical presence on the highstreet in the UK, announcing earlier this year it would be closing 60 stores over the next four years.
Major high street names have struggled to fight off the challenge of online retailers, with household names such as Game and HMV struggling.
Aside from consumers tightening budgets due to recessionary pressures, many retailers are struggling to adapt to the challenges that are faced by the continued rise in popularity of online retail.