CURRYS and PC World owner Dixons Retail is selling a loss-making European business in the wake of its merger deal with Carphone Warehouse.

Dixons will dispose of its ElectroWorld home electronics chain, which runs 26 stores in central Europe, to Slovak-based NAY.

The stores, based in the Czech Republic and Slovakia, made a loss before tax of £5.6m on sales of £129m in the year to April.

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As well as stores in the UK and Ireland, Dixons has operations in Norway, Denmark, Sweden and Finland through the Elkjop brand and in Greece through Kotsovolos.

Dixons chief executive Sebastian James said: "Following this transaction Dixons will be a market leader in every market in which it operates, delivering on one of our key strategic objectives."

Last week, Dixons Retail said it would merge with Carphone Warehouse in a deal that aims to bring together the mobile phone and electrical goods sectors.

The new group, to be known as Dixons Carphone, joins two companies with combined sales of £12bn, employing more than 43,000 people across Europe.