Carphone Warehouse CEO Alex Baldock has announced that the company will close 92 stores by the end of the year.
In a trading update that also focuses on the electrical and mobile phone retailer’s 2018/19 outlook Baldock said the company is taking “early action” as a result of a warning that pre-tax profits could plunge by 21%.
The retailer warned that it expects profits to be around £300m, down from the £382m it forecasted for the 12 months to 28 April, attributed to “further contraction in our markets”.
Carphone Warehouse said the store closures are part of margin initiatives in order to partially offset the contraction. It also said no jobs would be lost as staff will be offered the chance to move to larger outlets nearby.
Baldock, commenting on the forecast, said: “Eight weeks in the business have cemented my optimism about Dixons Carphone’s long-term prospects. I’ve found exceptional strengths, and though there’s plenty to fix, it’s all fixable.
“We’re number one in each of our markets, with people and capability no competitor can match. Our opportunity lies in making the most of those strengths, which we are nowhere near doing. And we must: nobody is happy with our performance today.
“We’re getting on with it, through a new leadership team and structure that’s promoted top talent, cleared away unnecessary layers and silos, and started to speed up decision-making. We’re already giving new impetus to areas crucial to our transformation such as data and analytics, marketing, digital, services and technology. We’re working at pace to bring clear long-term direction to the business.”
He added: “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.”