Kingfisher buys Streets Online
Now biggest UK e-tailer?
Kingfisher, the British retail conglomerate, is buying an 85 per cent stake in Streets Online, the e-tailer of records, CDs, games and books for £15.7 million.
The group said the acquisition of the £10m t/o Streets Online would complement its MVC chain of 87 entertainment stores. It quotes industry projections that the UK's music, video/DVD and games entertainment
market will grow by 8 per cent each year to around £5.7 billion in 2004. Around 17 per cent of this market will come from e-commerce.
The deal has won the blessing of Freeserve, holder of 14 cent of Streets Online, and a key distribution outlet for the e-tailer's AlphabetStreet, AudioStreet, GamesStreet and DVDStreet brands.
Freeserve, owned by Dixons, Kingfisher's biggest rival in electrical retailing, has shown it can drive a hard bargain, while proving that it is as independent as it has always claimed.
It gets £2.6m cash for its Streets Online shares - and it gets increased access to Kingfisher outlets with CD sign-ups at MVC stores - and marketing access to MVC's five million registered members. Kingfisher has also promised to fill "significant advertising space" on Freeserve, by promoting its general merchandise retail brands on the site.
Streets Online paved with brass
How Streets Online has scaled down its expectations: at the height of the market in February it sold a 14 per cent stake to BSkyB for £6 million. This was supposed to be a top-up prior to £150m float planned for the first half of the year. But like rival Jungle, bought last month by GUS for £37m , the company was beached in the post-March-hate-B2C-don't even think of IPO-ing market.
Even B2C e-tailers that did get their IPOs away are seeking 'strategic partners' (read 'new owners'). In recent days, QXL and Letsbuyit have both announced their interest in such alliances. ®