Dixons to Close 531 Mobile-Phone Stores, Cutting 2,900 Jobs

(Bloomberg) --

Dixons Carphone Plc plans to close 531 standalone mobile-phone stores in the U.K. with the loss of nearly 2,900 jobs in a further blow to the country’s already battered shopping districts.

The electronics retailer blamed changes in the mobile-phone market, with consumers upgrading handsets less often. The closures are unrelated to the coronavirus pandemic, it said.

Investors reacted favorably to the prospect of cost reductions, lifting the shares as much as 14% early Tuesday in London. Over the past 12 months they’ve fallen about 52%.

Following the closure of the stores in April, Dixons will focus on selling mobile devices through Carphone Warehouse “shop-in-shops” in 305 big Currys PCWorld stores and online.

The small standalone stores represent 8% of Dixons Carphone’s total U.K. selling space. The business said it expects almost 40%, or 1,800, affected employees to take new roles internally, but 2,900 people will lose jobs.

It’s the latest move by Chief Executive Officer Alex Baldock to turn around the business, which has struggled amid a U.K. retail downturn as more people shop online.

The company was created through a merger in 2014 of electronics retailer Dixons and the Carphone Warehouse mobile chain. It has not changed its outlook for the year and said that while it has not seen an impact from the coronavirus it is preparing for one.

The mobile part of the business is on track to lose 90 million pounds ($110 million) in the current financial year. Baldock said that without closing the stores its losses next year would have been significantly greater.

“In these turbulent times you have to take decisive actions now,” he said on a call. The company is committed to maintaining its 305 large stores, he added.

To contact the reporter on this story: Deirdre Hipwell in London at dhipwell@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

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