Retail Week compares potential merger partners Dixons and Carphone Warehouse.

Carphone Warehouse EuropeDixons
Branch numbers: 2,427Store numbers: 1,154
Sales: £3.69bnSales: £8.21bn
Headline EBIT: £136.6mUnderlying pre-tax profit: £94.5m
Group chief executive: Andrew HarrisonGroup chief executive: Sebastian James

Why would a merger make sense for Carphone Warehouse?

Carphone has a longstanding interest in wider technology and electricals categories as well as phones.

The mobile phone specialist hoped to transform the European electricals landscape through its tie-up with Best Buy. That ambition was thwarted as Dixons successfully reinvented itself and Best Buy’s big blue sheds were closed down in the UK.

Carphone has also developed its own ‘Connected World’ format, carrying a wider product range than one of its traditional stores, and is determined to become as strong a force in mobile devices generally as it is in phones.

Carphone, which has extensive store networks of its own overseas in countries such as Spain, also has a relationship with German retail giant Metro and its electricals business Media Markt/Saturn in Germany and the Netherlands. The retailer has also just struck a deal to operate 60 Samsung stores across Europe.

Why would a merger make sense for Dixons?

Following the implementation of Dixons’ renewal and transformation plan, Dixons has focused on building its multichannel capabilities, service credentials and strengthening operations in its core markets such as the UK and Ireland and Scandinavia. The growth of mobile commerce is likely to be a consideration behind a potential tie-up between Carphone and Dixons.

Over Christmas the Currys and PC World owner posted like-for-like growth of 5% in the UK and Ireland, and reported that “internet-led” sales climbed 23%.

Although Dixons has a strong presence in categories such as tablets, it is not so powerful in mobile phones, although Phones4U has 160 concessions in Currys and PC World stores.