Comment: Dixons Carphone | Aegon | trams

Terry Murden. Picture: Ian Georgeson
Terry Murden. Picture: Ian Georgeson
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there have been expectations of retail mergers resulting from the advance of online shopping and the pressure on bricks and mortar outlets. So the tie-up between Dixons and Carphone Warehouse will not be the last.

The deal itself is not exactly ground-breaking, but it does throw up some interesting dynamics that may help shape the future of what we must now refer to as multi-platform retailing. The big question is whether it is a deal prompted by a growth strategy or a defensive measure against the online raiders.

Aside from the usual list of acclaimed merger benefits – shared purchasing power, reduced costs, etc – the combined businesses will bring complementary product ranges together and create a distribution model designed for the modern retail environment.

Critics argue that cost-cutting is the core justification of the deal and the plan is to save £80 million a year by 2018. But it will also reposition some outlets in the click-and-collect era as collection centres, giving them a new purpose.

The chief executive of the newly-named Dixons Carphone, Sebastian James, is talking of more jobs, not fewer, and of more choice. Some say this could have been achieved via some form of partnership. Investors remain unconvinced and marked the shares down. Clearly, a work in progress.

Grace brings benefits to reshaped Aegon

ADRIAN Grace has taken his time to implement a strategy at Aegon that was clearly a bigger job than many outsiders understood it to be.

The job looked like a cost-cutting exercise with some tweaking of the proposition to refocus around key products that would boost the bottom line and keep its Dutch parent off its back.

It was clearly a much more root-and-branch project, involving a restructuring of the business and a change of direction.

He admits that he is working in an industry beset with challenges in the marketplace and is tackling both reputational issues and a tough regulatory regime.

Grace, however, seems wedded to the task of seeing through a job that he clearly believes is not yet complete. Growth is back in the company and he claims to have put a smile on the faces of his trimmed-down staff.

Tram gives boost to hotels and gin joints

OWNERS of properties, particularly empty or undeveloped ones, along the route of the Edinburgh tram must be rubbing their hands in anticipation of the service starting at the end of the month.
As stated here yesterday, there is increased interest from investors in land along the route, particularly at the Gyle. But the city centre is also seeing an uplift that could translate into some chunky transactions.

As we report today, Premier Inn, part of Whitbread, is to redevelop a former tax office in York Place which happens to be opposite the tram stop. A new gin distillery and visitors’ centre is being located at the west end of Princes Street, again to cash in on tram passengers, and the St James shopping centre developers are keen to help fund an extension of the tram to Leith.

The council may not recoup its £776m capital outlay on the system, but the city is poised to benefit in other ways.

Twitter: @TerryMurden1