Dixons heads for Harrods

Ironic that Dixons, which only two years ago was threatened by Harrods with legal action over a cheeky ad poking fun at the famous department store, is soon to be installed as the electricals concessionaire in the landmark Knightsbridge shop.

The rapprochement provided fun for the media, but the serious point is that it illustrates how far Dixons has come in the past few years. In particular Dixons’ standards of service, once regarded as risible, have been transformed.

There would be no chance of Dixons being allowed into Harrods unless it could provide service worthy of the world’s best-known shop. But Dixons bosses knew there was little chance of a future for Dixons at all unless it upped the ante on service. It was a foundation stone of boss John Browett’s renewal and transformation plan.

Dixons has changed its game on service. What was meant to be a differentiating point for new entrant Best Buy is now increasingly owned by Dixons, especially with the launch of its Knowhow service division.

Analysts refer to Dixons as a ‘binary’ stock. As torrid conditions continue, they see only two long-term outcomes: success or failure. There are fears about the outlook for Christmas and its ability to repay bonds next year, but the extent of changes made at Dixons make it likely to remain the winner in electricals.

Comet sparks limited interest

As Kesa directors consider offers for electricals chain Comet, it seems that trade interest in the chain is limited to non-existent. The restructuring firms are circling hungrily, and that makes a transaction problematic.

It is clear that Kesa bosses are determined to avoid any deal that would result in Comet’s administration. But should Kesa decide to retain Comet, it will have to act far more quickly than it has so far managed to remodel the business for the future.