One year after taking full control of PIXmania, Dixons Retail has paid €69m (£58m) to German holding group mutares AG to offload the internet retailer which is making a loss. Dixons Retail will not receive a penny from PIXmania’s new owners in a deal which sees them instead paying mutares AG to take PIXmania on the condition that the payment is used to revive the loss-making company.
The offload has allowed Dixons Retail to prevent the closure of the business which could have cost them around £90m. Dixons Retail increased their stake in PIXmania from 77per cent to 99 percent to give them full control of the business in August last year because at the time PIXmania were viewed by Dixons Retail to be at “the heart of our very successful UK multi-channel business” even though the firm were losing money.
Sebastian James, Dixons Retail chief executive has noted that the €69m paid to mutares AG has been put into a fund dedicated to turning the business around and that it was necessary for Dixons Retail to offload the firm as it “needs a different kind of entrepreneurial vigour”.
Mutares AG is a firm which owns a variety of small and medium sized businesses across Europe and specialises in buying firms which have had management changes or need turning around making PIXmania; who are a European internet retailer which specialise in electronic goods and digital photography, a perfect additional to the mutares AG family.
The deal will require representatives of PIXmania’s workforce to negotiate on their behalf and is conditional on the successful conclusion of these negotiations regarding the transfer of jobs.
There was good news for Dixons Retail with their shares rising more than 8% on the stock market after the announcement of this sale and the sale of their 32 ElectroWorld shops; their loss making Turkish chain, for £2m.