Dixons Carphone has blamed its slumping sales on a lack of demand within its smartphone unit over the last six months, saying its £440m statutory loss was because of changing market conditions. In total, mobile revenues in UK & Ireland were down 4%.
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 2%, with the second quarter of the year performing best, with revenues up by 4%. Group sales were up 1% year-on-year
The company posted profits of £54m 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 in order to reverse its fortunes.
"Our challenges are well understood in the market, i.e. 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 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.
“There are headwinds and uncertainty facing any business serving the UK consumer, we've had our own 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."
