Carphone Warehouse to shut 92 stores as profits tumble
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 Carphone Warehouse standalone stores over the next 12 months as it grapples with changing consumer habits.
It has not yet announced which stores will close. There are three Carphone Warehouse shops in Preston.
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.
Shares tumbled over 20% in morning trade as the company also updated the market 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 Â£382 million, down from Â£501 million in 2017. Next year the figure will fall to Â£300 million, the firm added.
Dixons Carphone added total revenue rose 3% in the year to April 16, while like for like sales were up 4%.
In the UK, comparable revenue grew 2% and was up 1% in the fourth quarter.
Growth was propped up by better sales in the international division, with like for like sales in the Nordics up 9% in the year and Greece up 11%.
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."