Pay-TV firm BSkyB to expand retail stores to 250

LONDON, Jan 10 (Reuters) - Pay-TV firm BSkyB (BSY.L) is to expand its network of retail stores across Britain to 250, after reaching an agreement with Land Securities (LAND.L), it said on Thursday.

The deal with the commercial property landlord is the latest expansion in Sky's store network, which began in 2006 after it acquired independent retailer You Me TV and its 59 stores.

Following the Land Securities deal it expects the total number of Sky stores to rise from 170 to 250 before the middle of 2008.

The shops offer consumers the chance to look at Sky products and to subscribe to its TV, broadband and telephone services.

Retail stores are Sky's third largest sales channel, following telephone and the Internet, but the expansion may surprise some as retailers havewarned of weak consumer spending recently.

BSkyB dominates the British pay-TV market and it had 8.7 million subscribers when it last reported in November, but analysts at Dresdner Kleinwort said on Thursday they believed the demand for Sky had "fallen sharply" in the Christmas quarter.

Citing market research from GfK, analyst Omar Sheikh said the consumer slowdown could already be biting for BSkyB and suggested that customer numbers could come under pressure this year.

Shares in the company were down 1.9 percent at 548 pence at 1530 GMT.

(Reporting by Kate Holton; editing by Rory Channing)