Dixons Carphone Warehouse has plunged into a statutory £440 million loss against headline profits of £54 million, after taking on £490 million of charges and facing – like everyone else – tricky trading conditions bedevilled by Brexit uncertainty.
Unveiling its results for the first half of its financial year, in which group sales reached £4.9bn the company unveiled a new strategy to cut costs by up to £200 million a year and overhaul its business to improve in online, mobile and store strategies.
“We’re focusing on our core and on four things that matter most: two big profitable growth opportunities in online and credit; revitalising our mobile business; and giving customers an easy experience,” says Alex Baldock, group chief executive. “We’ll deliver these through capable and committed colleagues, working in one joined-up business, with strong infrastructure.”
Baldock: “We’re underway and investing in all of these, including giving our colleagues at least £1,000 of shares, making every colleague a shareholder. We strongly believe aligning and energising the business behind our strategy in this way will benefit customers and shareholders.”
The refocussing in the company will centre on online and mobile. The company identifies online in all its forms as the real opportunity for growth, accounting already for more than 100% of growth across Carphone’s business.
The overhaul will aim to concentrate on giving customers access to a much larger range accessible through all channels, making it easier to find, buy, and get hold of technology online, focus on smartphone first, the growth channel within online and drive crossover benefits across electricals and mobile via credit and services.
“Mobile is central to our vision,” says Baldock. “It is the most important category for us, it is our largest, and the most important product to customers and where we are still number one in the market. But it is loss making and we need to change that. Our challenges are well understood in the market, such as reduced handset volumes and mix changes, have resulted in declining share for us. And our profitability has been impacted by mix, contractual pressure and an inflexible cost base.”
However, the company also acknowledged that Brexit and the resultant uncertainty is also hurting the bottom line.
“There are headwinds and uncertainty facing any business serving the UK consumer, we’ve had our own challenges, and our plan will take time,” says Baldock. “But, with this plan, we can now see the way to unleashing the true potential of this business. We believe in our plan, are underway making early progress and determined to make it a lasting success.”