European retailer Dixons Carphone announced it will close all 531 of its standalone Carphone Warehouse stores in the UK next month, axing around 60 per cent of its retail workforce as part of plans to return the mobile arm to profitability.
In a statement, Dixons Carphone CEO Alex Baldock said an expected £90 million loss from the UK mobile operation in its 2019/20 fiscal year (running to end-April 2020) is “unsustainable” and showed the unit “is currently holding the business back”.
Around 2,900 staff will be made redundant, with 1,800 to be offered new roles. The company noted standalone stores represented 8 per cent of its UK retail footprint, after it invested heavily to incorporate the business into 300 of its large Currys PCWorld electrical retail outlets in the country.
It explained declines in its UK mobile business are due to consumers looking online to buy mobile phones, upgrading less often and separating data and device costs from the same contract.
Baldock stressed the retailer must change with consumers, stating its decision to shutter stores marked a “fundamental transformation” to refocus the business more to an online model supported by a smaller retail footprint.
Kester Mann, CCS Insight consumer and connectivity director said: “Carphone Warehouse has been caught in the unfortunate crosshairs of lengthening mobile phone replacement cycles and ongoing apathy on the UK high street. It has been clear for some time that something had to give in its business.”
“A greater focus on online sales is a logical move,” Mann added, noting his company’s research had shown “approaching half of all mobile phones in the UK are now sold this way”.
“As well as saving costs, the company has an opportunity to offer a best-in-class web-based retail experience that could differentiate from rivals.”Subscribe to our daily newsletter Back