Dixons Retail has agreed to sell its 26 ElectroWorld stores in the Czech Republic and Slovakia to local electricals retailer NAY.
Sebastian James, group chief executive of Dixons Retail, said ElectroWorld – which had remained a loss-maker for Dixons – should flourish as part of NAY Group.
"I am very pleased," James said in a statement this morning. "Following this transaction, Dixons will be a market leader in every market where it operates, delivering on one of our key strategic objectives."
The full deal terms are undisclosed but it is expected to complete over the summer, subject to competition authority clearance. Dixons also "expects to receive a small deferred cash consideration spread over three years", James indicated.
ElectroWorld is a specialist electrical appliances retailer. Dixons divested itself of its loss-making Turkish arm in September – receiving £2m in cash from Turkish company Bimeks over two years for 32 stores – and its Polish operation back in 2009.
According to Dixons' statement, ElectroWorld's Czech and Slovak arms lost £5.6m before tax in the year to April, on turnover of £129m.
For NAY, on the other hand, ElectroWorld represents an opportunity. Peter Zálešák and Ján Tomáš, co-founders of NAY, said the deal is a a "big step" towards its goal of achieving €300m (£245m) of sales in central Europe – in part by entering the Czech market for the first time.
"And we strongly believe it allows the development of our market-leading position in Slovakia," Zálešák and Tomáš confirmed.
The ElectroWorld deal comes hard on the heels of Dixons' £3.8bn merger with mobile phone retailer Carphone Warehouse last week. In total, Dixons retains more than 1,000 stores, with more than half in the UK or Ireland.
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