Joining forces to become the high-street’s tech powerhouse
On Monday the largest mobile phone retailer on the high-street, Carphone Warehouse, announced that it was interested in creating a company with the high-street’s largest electronic’s retailer, Dixons, in a deal that would be worth almost £4bn and have more than 1,200 shops in the UK.
The deal has the potential to revolutionise the high-street tech retail industry, which is really something that’s peculiarly not taken off too well. It would combine shopping for consumer electronics alongside smartphone shopping, increasing the potential for the retailer to add accessories to purchases and even increase the likelihood of phone bundles that suit customer’s needs.
However, there’s one issue in the way: the Competition Commission.
While both companies operate in drastically different circles of technology, the merger could well be seen as creating a market monopoly and thus need investigating first. If the deal goes ahead, this would be the first time that the newly-created Competition & Markets Authority investigates a deal – due to it replacing the Office of Fair Trading and Competitions Commission in April.
Still, such a merger would improve Dixon’s business opportunities, allowing the sharing of supply chain and a potential for saving of money on property costs due to the combination of local stores. As Kate Calvert, an analyst at Investec, said to the Telegraph, the merger is “strategically logical”.
“Both businesses are industry leaders in their fields and the way technology is developing and converging, both are increasingly looking at connective services as a potentially lucrative revenue stream in the future,” she added. “Dixons has talked about services as a developing revenue stream and Carphone has its Connected World concept and recently announced a collaboration with Samsung Services to open 60 stand-alone experience stores.”
Such a merger isn’t too surprising as PC World stores have seen the likes of Phones 4 U setting up shop inside them for a little while now. It’s a logical that technology retailers will eventually converge.