Cellnet Buys #57m Link in Dixons Comms Chain

Telephone giant Cellnet has acquired a 40 per cent stake in Dixons? high street communications retail operation, The Link, for a total of #57 million.

The mobile phone operator hopes the move will help increase its presence in the high street against tough competition from established rivals. Cellnet will pay an initial #25 million with further payments of up to #32 million over the next five years

Cellnet has dismissed suggestions that it is seeking to gain control of the retailer, maintaining that the investment would help Dixons? plans to increase the number of stores from 86 ? the majority of which are in the South East ? to 200 nationwide.

The Link was established in 1994 by Dixons chairman Stanley Kalms, after the company saw a gap in the market to sell communciations on the high street. It specialises in selling communications products and services, including mobile phones, fixed line telephones, faxes, pagers, as well as a range of BT services.

The Link made a loss of #2.9 million on turnover of #21 million in the year to April 1996. Cellnet has been hit hard recently by an 85 per cent drop in subscribers between January and March, compared with the same period last year, and the abrupt departure last month of the company?s managing director, Howard Ford (PC Dealer, 19 March).

The alliance between Cellnet and The Link follows the trend of telephone companies and existing high retailers combining their efforts. Vodafone, the market leader in mobile telecoms, has interests in a number of airtime service operators including retailers Radio Rentals, Granada and Comet.