Retail group DSG International has begun negotiations to acquire Dabs.com, one of the UK's best-known internet retailers. The success of online sales in the GBP2 billion electricals sector, which is growing by 30% every year, has prompted DSG to move away the high street and align itself with internet retail.
Dabs.com claims to be UK's leading pureplay internet retailer of IT and technology products. Although its focus remains on PC's and related products, a reduced exposure to these categories has helped to insulate it from serious price deflation while allowing it to benefit from high demand for new technology products such as flat screen TVs and satellite navigation equipment.
The fact that Dabs.com has been able to successfully build a reputation in new categories will not have been lost on DSG, which will see this and its fledgling operations in France as further opportunities for growth as it seeks to double its online sales. In a retail climate where significant sales growth is becoming increasingly difficult to achieve, it is no surprise that the UK's leading electricals specialist group DSG International is looking to bolster its online operations with the purchase of Dabs.com.
Perhaps more importantly for DSG is the retailer's established online brand, which has been strengthened with the retailer's recent sponsorship of Fulham Football Club which, though costly, propelled the Dabs.com brand into millions of homes. Due to generally higher ATVs in the electricals sector than many other retail sectors, customers are often keen to purchase electricals from recognized online brands such as Dabs.com which have established expertise in online delivery and customer service. With the backing of DSG, Dabs.com will be able to continue this proposition with added scale benefits enabling it to remain competitive on price.
For DSG, this move represents another step towards re-aligning its business away from the high street where its Dixons chain due to increasing costs and high levels of deflation has struggled in recent years. Along with this move the retailer is currently trialing two further physical store formats, Dixons Warehouse and IT help and support centre Press F1.