Currys’ strong brand is helping it generate takeover interest

Currys recently rejected an initial takeover approach of £700m from Elliott – the investment firm that owns Waterstones, and which is reportedly mulling a formal offer. On top of that, the Chinese ecommerce group JD.com is, according to the BBC, thinking about entering the takeover melee. The interest coincided with, as of Monday morning, a 33% increase in Currys’ share price.

So why is Currys attracting this attention, particularly when it has reported declining like-for-like revenue over the Christmas trading period?

Data from YouGov BrandIndex may provide some insight. Impression scores, which measure whether consumers have a positive or negative view of an organisation, were – for the general retail sector on average – at 13.2 as of 18 February 2024; Currys more than doubled these scores at 30.5.

Measures tracking Quality are similar. For the industry on average, these scores sit at 10.5; at 30.6, Currys performs three times as well. It does even better in terms of Customer Satisfaction scores, which, on average, sit at 11.0, and for Currys sit at 33.6.

Even when it comes to metrics where it performs less favourably, it still outdoes the average. Recommend scores, for example, are at 9.4 for the sector; Currys’ scores for this measure are 23.3. The smallest gap is in terms of Value for Money, where the sector average is 5.7. But even here, Currys boasts a four-point lead with Value scores of 9.7.

Index scores, which measure general brand health, provide the most succinct overview of the retailer’s strength compared to the competition. For the sector, they are 9.2; Currys, on the other hand, scores 23.5.

So if Currys appears to be struggling commercially at the moment, it’s still a brand the public like and respect. Even if the numbers aren’t heading in the right direction, this perhaps explains why the brand is so attractive to JD.com and Elliott – and equally, may explain why the company has rejected the latter’s initial takeover approach on the grounds that it “significantly undervalued” the business.