DSGi in particular may come under pressure, analysts believe, because it is struggling to cope with a plethora of strategic issues already.
Landsbanki analyst Paul Deacon said the tie-up would “likely provide a new and disruptive competitive force”, which he thought would be a particular problem for DSGi's PC World business.
He said: “Carphone Warehouse is a formidable competitor and the newly formed joint venture company plans to accelerate growth, particularly of its larger store format, and this is likely to add to pressure on DSGi.”
Investec analyst David Jeary said: “While there are no detailed plans for format and country priority, it is clear that Best Buy is looking to open a substantial number of broad-based consumer electronics stores. This is clearly bad news for all the major incumbents.”
Panmure Gordon analyst Christian Koefoed-Nielsen said: “Best Buy has made no secret of its desire to enter Europe. They have purchasing scale, expertise and have built a well-regarded service capacity. Their chosen entry route, a joint venture with Carphone Warehouse, will remove any bid speculation in DSGi or Kesa and enables Best Buy to start with a clean sheet rather than acquiring arguably compromised trading assets.”
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