DIXONS, the retail group that owns PC World and Currys, is reviewing the future of The Link, its high-street mobile- phones operation.

The review could lead to a sale of the business, which bankers believe is worth up to £200m.

John Clare, Dixons’ chief executive, is understood to have discussed the future of The Link with Peter Erskine, chief executive of O2, the mobile-phone operator, which owns a 40% stake in the chain.

It is thought that each party can exercise a pre-emption right that would prevent The Link being sold to a competitor of the other shareholder.

Both Clare and Erskine, however, are thought to be confident that a compromise can be reached.

The Link operates through almost 300 stores across Britain, the first of which was opened in 1994. However, the chain had a torrid Christmas trading period, with like-for-like sales falling by 9% in the four weeks to January 8.

Dixons’ share price has plunged sharply in recent weeks as brokers have downgraded profit forecasts on the back of fears that the group will be hard hit by the downturn in consumer spending.

The vast majority of City analysts now have a sell recommendation on the stock.

Philip Dorgan, retail analyst at Panmure Gordon, wrote in a recent note: “In a slowing retail environment, we would expect Dixons to feel the pinch, with a discretionary product range, high average selling price and UK profits that have been flat for five years, despite the consumer boom.”

When Clare was appointed group managing director of Dixons in January 1992, the company’s shares were trading at 51.4p. They closed on Friday at 152¼p.