Dixons Carphone to start trading

Dixons Carphone, which employs around 43,500 staff across Europe, aims to tap into the way technology will transform households by fusing the mobile phone and electrical goods sectors in what is called the “Internet of Things”.

The firm will look to adapt to a new world where smartphones, tablets and rapid internet speeds will mean appliances such as washing machines and fridges are controlled by the touch of a mobile device.

Such a retail behemoth would be expected to have more power to stand up to online competition from electrical retail rivals such as AO World.

Dixons chief executive Sebastian James will run the new group, while Carphone founder Sir Charles Dunstone, will be its chairman.

When the merger was announced in May, Mr James said: “The ability to take what we have built in electrical retailing and add the profound expertise of Carphone Warehouse in connectivity would make us a leading force in retailing for a connected world.”

The merger is expected to deliver combined yearly savings of £80 million although there will be restructuring costs of £55 million to £60 million and extra investment of £70 million to £80 million.

Carphone Warehouse was founded by Sir Charles in 1989, and has around 2,000 stores, including more than 800 in the UK. Dixons, founded in the 1930s, has 943 stores in seven countries, including more than 500 in the UK.

Carphone’s high street presence is not seen as overlapping with Dixons’s out-of-town stores by analysts, so the two sets of shop portfolios are seen as complementary.

The combination of the two FTSE 250 firms is likely to create a new FTSE 100-sized group, as well as merger savings to please investors.

Independent analyst Louise Cooper said at the time of the merger deal that there was “likely to be much scepticism” about plans for better growth through putting the businesses together.

She said: “Two past their sell-by date retailers merging does not an Amazon make.”