More than 90 Carphone Warehouse stores set to close over next 12 months
Nearly 100 Carphone Warehouse stores are to close this year as the retailer's new boss pledges to "take action" to tackle challenges in the firm's troubled mobile phone unit.
Dixons Carphone said that it will shut 92 of its smaller standalone Carphone Warehouse shops over the next 12 months as it gets to grip with changing consumer habits.
Cash-strapped consumers are holding on to older devices for longer and going "Sim-only", which has 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 branches nearby. The group has around 1,100 sites nationwide.
Many Carphone Warehouse shops are just a short distance from the larger PC Word stores, most of which now include Carphone outlets. It is these smaller stores that are most vulnerable, although the company is not yet saying which shops face closure.
In Telford, for instance, there is a Carphone Warehouse branch in the Telford Shopping Centre and a large Currys PC World store, including a Carphone Warehouse outlet, on the town's Forge Retail Park. Similarly, in Shrewsbury there is a Currys PC World on the Meole Brace Retail Park and a Carphone Warehouse branch on Pride Hill.
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.
Shares in the company tumbled over 20 per cent yesterday morning after it also updated on trading and warned that profits would continue to fall.
Dixons Carphone said that full year pre-tax profit is expected to come in at £382 million, down from £501 million in 2017. Next year the figure will fall to £300 million, the firm added.
Dixons Carphone added total revenue rose three per cent in the year to April 16, while like for like sales were up four per cent.
Growth was propped up by better sales in the international division, in areas like Greece and the Nordic countries.
Neil Wilson, chief market analyst at Markets.com, said: "What can only be described as a nasty little profits warning from Dixons Carphone this morning.
"Grim for sure but, as new boss Alex Baldock points out, it's all entirely fixable.
"Management warn of contraction in the UK electricals market as well as some cost increases, notably from higher labour costs as a result of the increase in National Living Wage.
"Dixons looks a bit flabby, and the market is just as soft, but there should be some easy wins in terms of making it leaner, especially around store closures."
