Kingfisher, the retailing group, yesterday strengthened its online presence by forging links with internet business Freeserve and announcing that it is to buy Streets Online, the entertainment retailer.
Kingfisher, whose store brands include Woolworths, MVC, the music and video retailer, and Superdrug, will pay £15.7m to gain a 85% majority stake in Streets Online. This, the company says, will complement its 87-store MVC retail business.
Ian Cheshire, e-Kingfisher's chief executive, said: "The acquisition of Streets Online with its well developed e-commerce infrastructure is another example of Kingfisher's 'bricks and clicks' strategy to offer customers multi-channel access to its products."
Kingfisher, which is due to split into two groups, a DIY and electricals retailer and a general merchandise operation, will buy Streets Online from shareholders, including a 14% stake from Freeserve for £2.6m.
The remaining 15% of the company will be kept by Sky New Media Ventures, part of Rupert Murdoch's British Sky Broadcasting. Kingfisher, which launched an e-Kingfisher arm in June, has also entered into an advertising deal with Freeserve. Under the agreement Kingfisher will distribute CDs that give users access to Freeserve, through its MVC stores, and Freeserve will provide Kingfisher brands with advertising space on its portal. Streets Online will become part of Kingfisher's new General Merchandise Company following the proposed demerger.
Martin Toogood, chief executive of General Merchandise said: "The purchase of Streets Online will give General Merchandise a substantial share of the online market and will reinforce our position as one of the UK's leading entertainment retailers."
A Kingfisher spokesperson said the company expected Streets Online to be profitable by 2002. Streets Online has more than 300,000 customers and it was projected to have annual sales of about £10m in 2000, Kingfisher said.
News of the link with Freeserve comes as speculation suggests Kingfisher will sell its 35% stake in Liberty Surf, one of France's largest internet service providers.
