(Alliance News) - Dixons Carphone PLC said Tuesday it will close all of its UK standalone Carphone Warehouse stores - 531 shops representing 8% of its total UK selling space.
Shares in the retailer jumped 19% to 74.44 pence each in London on Tuesday morning in response to the announcement.
The company said mobile phones are to be sold through Carphone Warehouse sections of Currys PCWorld electrical shops.
Dixons Carphone expects 2,900 redundancies as the businesses are combined. It said the 70 Carphone Warehouse stores in the Republic of Ireland aren't affect, nor are international operations.
Alex Baldock, chief executive of Dixons Carphone, said: "Customers are changing how they buy technology, and Dixons Carphone must change with them. Today's tough decision is an essential part of that, the next step in making our UK Mobile business a success for customers, colleagues and other shareholders. Clearly, with unsustainable losses of GBP90 million expected this year, Mobile is currently holding back the whole business".
Dixons Carphone is the product of a 2014 merger of electronics seller Dixons Retail and mobile phone retailer Carphone Warehouse. Since then, Dixons Carphone has been opening Carphone Warehouse shop-in-shops in Currys PCWorld stores and now has 305 of these.
Dixons Carphone added that it has not yet seen a "material impact" from Covid-19 but is preparing for one. It said it still expects adjusted pretax profit of GBP210 million in its current year ending in April. Headline pretax profit in financial 2019 - excluding one-off costs - was GBP298 million.
"As a group, we are monitoring the situation closely. We are aware that our stores could experience a significant reduction in sales in the months ahead and we are modelling a range of downside scenarios and planning accordingly. Our large bank facilities have substantial headroom (on capacity and covenants) and over two and a half years until maturity," Dixons Carphone said.
By Tapan Panchal; tapanpanchal@alliancenews.com
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