Britain's two biggest computer retailers are on the verge of a legal battle over branding.
Dixons Group, which owns the PC World chain of computer stores, is threatening to sue Time Group to block the latter's plans to rename its stores Computer World.

"We have spent millions of pounds building a successful brand - 'PC World, the Computer Superstore' - and intend vigorously to defend our franchise", PC World managing director Simon Turner told the Sunday Telegraph.

Dixons' customer research has reportedly found that shoppers tend to assume there is a link between the two brands.

"We believe it is inevitable that there will be brand confusion", said Mr Turner.

"We hope that Time will cease without us taking legal action but we are fully prepared to take this to court".

If there were to be legal action we would defend it vigorously

Dixons is the UK biggest consumer electronics retailer and operates The Link mobile phone chain and Currys household goods stores as well as its own branded shops.

Lancashire-based Time, which is privately-owned, became the number two computer retailer when it bought struggling rival Tiny Computers in January 2002.

Time said it would trim back the merged group's stores from 275 to 150 and rebrand them as 'Computer World'. The launch of the new chain was timed for June.

Time has acknowledged it is "in talks" with issue about the issue of what the stores should be called.

However, it denies it is piggy-backing on the sucess of PC World.

"If there were to be legal action we would defend it vigorously as we are not passing off The Computer World as PC World", a company spokesman said.

Both Dixons and Time have been hit by the downturn in the market for PCs.

Dixons pre-tax profits for the 28 weeks to November 2001 fell £87.4m from £90 for the same a year earlier.

Dixon's PC sales fell 17% overall, but its PC World stores bucked the trend, posting a 5% rise in sales.

Time had sales of £244m in the 12 months to June 2000 but made a pre-tax loss of £3m.