The unlikely partnership comes after a spat in which Dixons directly tried to steal customers from Harrods by encouraging people to browse at the upmarket store before buying from Dixons.co.uk at lower prices.
Harrods yesterday laughed off the advertising campaign saying: “In fact we were pleased they recognised our service levels. It’s all a bit amusing.”
Dixons, which operates on the High Street as Currys and PC World, will replace a string of smaller electronics concessions in a new 11,000 square foot department on the third floor of the Knightsbridge store.
Harrods said the department would be high end and “not the kind of range you see in the average high street store”. Dixons said the department would sell leading-edge computing and audio visual equipment.
Dixons has issued a string of profit warnings this year but is pinning its hopes on iPad sales as well as designer headphones and 3D televisions.
David Lloyd-Seed at Dixons Retail said: “This gets the message across we have changed as a business and have a different level of customers service and product than you’d associate with the old Currys.”
Dixons shares lost 6.1 per cent yesterday to close at 15.2p.