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Dixons Carphone boosted by TV, fitness gadget and Shark vacuum sales

por Chantal Neel (2020-06-08)

Grayscale Photography of Woman in Laundry Shop \u00b7 Free ...Sales of supersize televisions, Shark vacuum cleaners and fitness-related gadgets helped Dixons Carphone to record a small growth in its electrical division over the Christmas period.

Overall sales at the high street giant remained lackluster however, as it continues to struggle with its mobile phone arm.

The retailer initially said sales rose 2 per cent on a like-for-like basis in the ten weeks to January 4 with 8,000 smart speakers being sold each day and record purchases of items including Fitbits and Apple Airpods.

In the ten weeks to January 4, Dixons Carphone sold 8,000 smart speakers each day and saw record purchases of Fitbits and Apple Airpods

Embarrassingly, it had to reissue the Christmas trading figures to say sales went down 2 per cent, not up. 

Overall revenue growth was held back by the drop in the continuous decline in mobile phone sales at Carphone Warehouse, which slumped 9 per cent in the ten week period. 

Chief executive Alex Baldock has previously said the mobile phone sector 'was a 'challenging' market.

He has written an optimistic assessment of the company's performance though, stating: 'We've had a good Peak in a weak UK market and we're on track to deliver what we promised for this year, and with our longer-term transformation. 

'Peak saw us continue to invest in our strategic initiatives with encouraging results. Credit and services adoption rates increased, online sales grew strongly, and our newly remodelled stores performed well.





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'Coupled with our unambiguous 'You won't get it cheaper. Full stop' price promise, alongside better availability and delivery, this led to big improvements in customer satisfaction and strong market share gains in electricals.'

Dyson Health & Beauty sales jumped 20 per cent, there was a near doubling of Shark Vacuums, while 75 per cent more 65-inch televisions were bought. 

Overseas, there was stronger growth for the retailer's Nordics and Greek divisions, with like-for-like sales up 3 per cent and 6 per cent respectively. 

Dixons Retail and Carphone Warehouse merged in 2014 to create a £3.8billion firm

Dixons Carphone added that demand for domestic appliances and kitchens was high, with online growth up 5 per cent. In the UK and Ireland online sales rose 7 per cent.

On the mobile business, the company said it is working on plans to launch a new offer later this year. And its focus on selling goods on credit continues to be successful, with such transactions climbing 40 per cent.

Dixons Carphone was created in 2014 from the merger of electrical retailer Dixons Retail and mobile phone company Carphone Warehouse, creating a £3.8billion firm with annual revenues of nearly £11billion.  

The merger brought the two companies, as well as brands Currys and PC World under one roof. 

It was hoped the deal would enhance the company's buying power and produce annual savings of up to £80million.

Despite initial early rises, the share price has subsequently dropped from about 500p per share at the end of 2015 to less than 150p today. 

It has struggled with poor mobile phone sales, strict contracts agreed with mobile network operators that required the retail chain to make high sales targets and a cyber attack in 2018 that saw hackers steal the data of 5.9 million credit cards.

The firm was fined £29million in March last year by the Financial Conduct Authority (FCA) for mis-selling its mobile insurance service Geek Squad

The firm was fined £29million in March last year by the Financial Conduct Authority (FCA) for mis-selling its mobile insurance service Geek Squad. 

Regulators said the company had 'persuaded customers to purchase the Geek Squad product which in some cases had little to no value because the customer already had insurance cover.' Baldock said the firm had made a number of changes in response to the revelations. 

Over the last year, the company has undertaken a major transformation programme to try and become profitable again. 

Dixons Carphone dramatically cut its first-half losses of the financial year to £86million from £440million previously.

John Moore, senior investment manager at Brewin Dolphin, says that despite troubles at the retailer, it 'continues to bolster its credentials as a survivor. 

'Its electricals and online businesses are delivering growth in a particularly weak UK retail environment.'

He added: 'The mobile division may remain the problem child...In fact, given typical turn-around times, it may be some time yet before any good news comes from this side of the business. 

'If management can execute its plans, a recovering mobile division coupled with continued progress at Dixons Carphone's other operations could lead to better days ahead for investors.'

Shares in Dixons Carphone rose 3.9 per cent to 148p in early trading.


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