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Dixons Carphone plans US tie-up

Published 02/07/2015

Dixons Carphone's Connected World Services arm has agreed a deal with Sprint - America's third largest mobile phone group
Dixons Carphone's Connected World Services arm has agreed a deal with Sprint - America's third largest mobile phone group

The newly created company behind Carphone Warehouse and Currys PC World has announced plans to launch up to 500 stores across the US under a tie-up with one of America's biggest telecoms firms.

Dixons Carphone's Connected World Services (CWS) arm has agreed a deal with Sprint - America's third largest mobile phone group - to open and manage Sprint-branded stores selling phones and tablets.

The joint venture will initially see the firms open around 20 stores across areas such as Chicago and Miami, but if successful Dixons plans to invest up to 32 million US dollars (£20.5 million) in a 50/50 joint venture with Sprint to roll out up to 500 outlets.

Andrew Harrison, Dixons Carphone deputy group chief executive and head of the Connected World Services division, said: " This is a very exciting venture for us, and is a significant step in growing our CWS business in the US.

"We bring specialist knowledge and skills to this partnership and will be looking to deliver innovation and outstanding customer service under the Sprint brand."

Sprint has nearly 60 million customers and already runs around 3,000 wholly-owned and dealer operated stores across America.

But it wants Dixons Carphone to provide retail expertise and advice to help it expand further and increase its market share across the States.

Marcelo Claure, chief executive of Sprint, said the group wants to tap into Carphone's "know-how as one of the world's leading wireless retailers to benefit Sprint and its customers".

"We are committed to offering the best customer experience when buying wireless products and services," he added.

Carphone has experience in the US retail market prior to its merger with Dixons, having worked with consumer electronics giant Best Buy on its profitable joint venture in America, Best Buy Mobile, which ended when Best Buy bought out Carphone in 2012 for 1.3 billion US dollars (£833 million).

But Carphone's UK and European tie-up with Best Buy did not fare so well, with the US group selling its stake in the joint venture back to Carphone, while their plans for Big Box style consumer electronics megastores in the UK were also scrapped and all 11 stores opened under the deal were closed less than two years after opening.

Dixons also had an ill-fated foray into the US previously, through its takeover of 147-strong US electrical retail chain Silo in 1987, which it sold off in 1993.

Nick Bubb, an independent retail analyst, said: "Carphone had a great deal of success with its venture with once-mighty Best Buy in the US and there is nothing to stop them now working with their former rival Sprint."

Shares in Dixons Carphone rose as much as 4% after the Sprint deal was announced.

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