The slump in the mobile phone industry has hit Dixon Carphone particularly hard with the outfit reporting a £440 million loss.
Dixons Carphone has blamed its slumping sales on a lack of demand within its smartphone unit over the last six months, and its £440 million loss was because of changing market conditions. Mobile revenues in UK & Ireland were down four percent.
Although Carphone’s electricals market share was up over the half-year period across all of the company’s territories and like-for-like revenues were up two percent, with the second quarter of the year performing best, with revenues up by four percent. Group sales were up one percent year-on-year.
The company posted profits of £54 million just last year, however, since then the sudden downturn has forced the closure of 92 of its 700 stores across the UK.
The company’s boss, Alex Baldock described its mobile division as “loss-making”, adding that it needed to make changes to reverse its fortunes.
“Our challenges are well understood in the market, i.e. reduced handset volumes and mix changes have resulted in a declining share for us. And our profitability has been impacted by mix, contractual pressure and an inflexible cost base. However, the company said it would focus on revitalising its mobile business, giving customers an “easy experience” and also reward its employees with a shares plan. Employees will receive at least £1,000 worth of shares, making each of its 3,000 workers a shareholder in the hope this will drive them to back the company’s growth plans.
“Headwinds and uncertainty are facing any business serving the UK consumer, we’ve had our challenges, and our plan will take time”, Baldock said. “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.”
