Dixons pays £59m to offload albatross arm PIXmania

Retailer shells out to rid itself of unit that hemorrhaged £114m in losses last year

Seven years after acquiring a majority stake in PIXmania for €266m, Dixons has paid a German industrial group €69m (£59m) to take the loss-making e-commerce business off its hands.

After completing consultations with the relevant French works councils, the Brit retailer has signed an agreement to sell the problematic outfit to German-listed industrial holding company mutares.

As part of the deal, Dixons has agreed to hand mutares a €69m dowry that will be ring-fenced to fund Pixmania's development.

That figure only makes sense in the context of Pixmania's yawning losses - it haemorrhaged £114.3m in Dixons' last financial year alone - and Dixons said the disposal would be accretive to its underlying earnings this year.

Dixons tentatively announced the planned deal on 7 September and chief executive Sebastian James said he was delighted to have assuaged French labour interests so swiftly.

"This is testament to the strength of the plans that mutares has for the business, and to the vision that they were able to share with our colleagues at PIXmania," he said. "I believe that the company has an exciting future, and I look forward to watching it flourish under new ownership."

Dixons bought a 75 per cent chunk of PIXmania for €266m in 2006 and only slurped the last remaining stake last August, before closing all its physical stores earlier this year.