Dixons Carphone to close 92 stores as it warns of profit fall

New chief executive plans cost cuts to help mobile phone, electrical retailer recover

Dixons Carphone said it expected headline pretax profit for its 2018-2019 financial year to be about £300 million (€345 million). Photograph: iStock

Dixons Carphone said it expected headline pretax profit for its 2018-2019 financial year to be about £300 million (€345 million). Photograph: iStock

 

British retailer Dixons Carphone said profit would fall by 21 per cent in the current year, as its new chief executive warned that he needed to fix problems at the company and close shops at a time of a contracting UK electrical market.

Dixons Carphone said it expected headline pretax profit for its 2018-2019 financial year to be about £300 million (€345 million), some 21 per cent behind the £382 million it is forecasting for the 12 months ended April 28th, 2018.

Chief executive Alex Baldock, who joined two months ago from online shop Shop Direct, said he planned to cut costs to help the mobile phone and electricals retailer recover and had already started a process to simplify its processes.

As part of his cost-saving measures, he said he planned to close 92 Carphone Warehouse standalone stores this year to help improve gross margins.

“Though there’s plenty to fix, it’s all fixable,” he said in a statement on Tuesday.

The forecast for 2018-2019 profit represents a significant downgrade from a current consensus forecast of £387 million, according to Thomson Reuters data. – Reuters