Sunday 18 November 2018

Carphone Warehouse to shut 92 stores as main street pain continues

Pedestrians walk past a Dixons electrical retail shop in London - REUTERS
Pedestrians walk past a Dixons electrical retail shop in London - REUTERS

Ravender Sembhy

Nearly 100 Carphone Warehouse stores are to close this year as the retailer's new boss pledged to "take action" to tackle challenges in the mobile phone market.

Dixons Carphone said that it will shut 92 Carphone Warehouse standalone stores this year as it grapples with changing consumer habits.

None of the stores in the Republic of Ireland earmarked for closure as part of today's announcement, the company confirmed.

Carphone Warehouse has over 80 stores throughout the Republic of Ireland.

Hard-pressed consumers are holding on to older devices for longer and going "Sim-only", which have dented the group's performance.

However, the firm insisted that no jobs will be lost as staff will be offered the chance to move to larger outlets nearby.

New boss Alex Baldock, who replaced the long standing Seb James earlier this year, said: "Right now, with our international business in good shape, we're focusing early action on the UK.

"In electricals, we're focused on gross margin recovery. In mobile, we're stabilising our performance through improvements to our proposition and network agreements.

"In both, we'll work hard to improve our cost efficiency. We won't tolerate our current performance in mobile, or as a group. We know we can do a lot better."

The store closures will add to the pain on the high street, with Dixons Carphone adding its name to the long list of retailers - Carpetright, Mothercare, Byron and others - to have shuttered outlets in the face of falling consumer confidence.

Mr Baldock added that he is renegotiating contracts at Carphone Warehouse with the aim of "improving our business model", while also pointing to a difficult electricals market.

Dixons Carphone made the announcement alongside a trading update in which it said total revenue rose 3pc in the year to April 16, while like for like sales were up 4pc.

In the UK, comparable revenue grew 2pc and was up 1pc in the fourth quarter.

Growth was propped up by better sales in the international division, with like for like sales in the Nordics up 9pc in the year and Greece up 11pc.

Dixons Carphone added that full year pre-tax profit is expected to come in at £382m, down from £501m in 2017.

Press Association

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