Feeds

Dixons keeps wolves from the revolving credit facility door

Can bricks-and-mortar houses resist lupine halitosis forever?

Choosing a cloud hosting partner with confidence

Dixons Retail has inked a £300m revolving credit facility with its financial backers that should ease the cash flow of Blighty's largest retailer.

The deal extends Dixons current facility, which was due to mature next year, until the end of June 2015.

Sources say this will provide short term guarantees that should keep the wolves well away from the door, so to speak.

According to Dixons the "expected requirements and objectives" include reduction of the facility's size to £200m by 2014.

"This facility provide the appropriate level of committed financing for the group's needs and the financial covenants have been slightly relaxed, reflecting the group's improving cash generation," it said.

The retailer remains on course to "redeem" the £160m bonds with an interest rate of 6.125 per cent due by 15 November this year, it said.

The group, like many in retail, saw its credit insurance lines scaled down by major indemnifiers in late 2008 and into 2009 as nervousness built around the sector in anticipation of an insolvency spike.

Not all lines were reinstated, according to sources with knowledge of the matter.

Then Dixons chief exec John Browett put in place a transformation programme that included closing and reformatting stores, and building a services-based business in a bid to draw a line under its poor reputation for customer service.

The business has fared better than other major CE retailing groups, with Kesa Electricals paying a VC to take Comet off its hands and Best Buy beating a retreat from the UK - and also axing staff.

Earlier this month Dixons indicated sales slid in fiscal 2012 but a Q4 surge in activity meant the year was "better than anticipated". Final numbers are due out next month.

The fate of traditional CE retailers hangs in the balance according to some analysts, and folk in the IT credit sector questioned the sustainability of the bricks and mortar business model.

"Credit facilities like this give suppliers a higher degree of confidence in the liquidity of a business, but questions about CE retailers' longer term future remain due to the massive overheads many carry," said one industry source. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
French 'terror law' declares WAR on the INTERNET itself, say digi-rights folks
Liberté, Égalité, Fraternité: Two out of three ain't bad
SCREW YOU, EU: BBC rolls out Right To Remember as Google deletes links
Not even Google can withstand the power of Auntie
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.