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Dixons Carphone to shut 130 outlets to focus on superstores

Published 26/01/2016

Dixons Carphone hailed a 'strong' performance over Christmas and edged its annual profit outlook higher
Dixons Carphone hailed a 'strong' performance over Christmas and edged its annual profit outlook higher

Retail giant Dixons Carphone is to shut more than 130 stores under plans to roll out electrical superstores merging its three main brands across the UK and Ireland.

The group said it will overhaul all its PC World and Currys stores to relaunch as so-called three-in-one stores, combining PC World, Currys and Carphone Warehouse over the next year and a half.

It will close 134 stores as part of the revamp, but Dixons Carphone said it will relocate all staff impacted to nearby superstores.

Details of the changes came as the group hailed a "strong" performance over Christmas and edged its annual profit outlook higher.

It said UK and Ireland like-for-like sales lifted by 5% in the 10 weeks to January 9, with the strongest trading day in its history on Black Friday in November and a good start to the clearance sales on Boxing Day.

The group - created following the £3.9 billion merger of Dixons and Carphone Warehouse in the summer of 2014 - now expects to post pre-tax profits of between £440 million and £450 million for the 12 months to May, against £381 million the previous year.

Humphrey Singer, group finance director at Dixons Carphone, said: "We had a fantastic Christmas.

"We had a record Black Friday and our meticulous planning for the period has paid off."

He added the roll-out of the new superstores will be better for staff and customers, following a good response to the 243 superstores it has already launched.

"Customers prefer shopping in these stores and colleagues prefer working in them, he said.

Dixons Carphone will see its store numbers reduce to 323 in the UK from 402 and to 15 in Ireland from 27, while it is also cutting the number of standalone Carphone Warehouse mobile stores to 684 from 723 in the UK.

It said that despite the closures, it still aims to have the vast majority of the population within 20 minutes' drive of one of its superstores.

The overhaul will take place in its next financial year, starting in May, and will cost £50 million to refit, with another £70 million to cover additional costs.

But Dixons Carphone said the plans should boost annual earnings by around £20 million.

Seb James, group chief executive, said: "Following the merger, it has become clear to us that customers really like our fully refurbished three-in-one store concept."

It has already rolled out a raft of three-in-one stores since the merger in 2014.

The merger is expected to provide an £80 million financial boost from additional sales and lower costs, with savings of £40 million expected in this financial year alone.

Over Christmas, Dixons Carphone said it sold 152,000 NutriBullet blenders and 66,000 cordless Dyson vacuum cleaners.

Mr James said the chain saw the return of the "two-humped camel shape" trading that first emerged last year, with sales peaking on Black Friday and once again in the clearance sales after Christmas.

Dixons Carphone has already started planning for the next Black Friday at the end of this year.

But its festive performance comes in sharp contrast to that reported by Argos owner Home Retail, which earlier this month warned over profits after it said the chain suffered falling sales amid ''mixed'' trading.

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