back to article Don't panic: Dixons Carphone's share price crashes 30% after statutory losses hit £329m

Beleaguered retailer Dixons Carphone has warned of "more pain" and "substantial losses" in its mobile business in the year to come after reporting a sharp fall in group profits for fiscal '19 ended 27 April. The challenges were first highlighted by Dix-Car at the half-way stage of its financial year when it wrote down the …

  1. A Non e-mouse Silver badge

    Changes in the mobile market

    I believe there are two changes in the mobile market that are in effect here.

    Firstly, improvements in smart phones have slowed enormously. This means there are fewer "must have" features for people to have. Their current phone is good enough so why buy a new one?

    Apple now offer 0% finance on their phones. One of my kids bought a new iPhone from Apple on the 0% finance and the Apple sales droid said that since they started offering 0% finance, sales have increased. With people being able to get 0% finance from Apple, shorter term/more flexible SIM only deals for airtime will be more appealing to people.

  2. tmTM

    No surprises here

    Merge a flagging tech retailer with an almost obsolete phone retailer and you'd expect the thing to sink like a stone.

  3. Anonymous Coward
    Anonymous Coward

    When you can find detailed phone specs on an online seller's site up a big river but can't find them on display next to the phone in a Carphone Whorehouse, and when a SIM-only Android One phone with 2GB RAM, 64GB storage, and 8-cores costs under £200 online with next-day delivery, and you can get 4GB (or more) pay-monthly deals for a tenner from the Mobile network providers, what exactly is the point of these stores?

    1. Anonymous Coward
      Anonymous Coward

      Forget the big river, GSMArena must surely be a factor? It tells you far more than Amazon does.

      1. John Brown (no body) Silver badge

        The majority of buyers don't look at the specs. They look to see if the make/model their friends have is available, what the price is and what deals they can find. They care very little about screen resolution or technology, CPU type and speed or size of usable RAM.

        1. Anonymous Coward
          Anonymous Coward

          True, but someone tends to be the "technology lead" who chose the thing based on specs and reviews in the first place and has been bending everybody's ear ever since with how good it is. Then the others try to get it cheaper.

    2. hoola Bronze badge

      And that is the problem, buying online may save you money now but when there are no shops left, then what.

      For far too long online only has benefitted from all the "tax mitigation" tricks, low rates on cheap tin sheds built with EU regeneration money.

      The amount of stuff on Amazon that is skipping VAT is unbelievable:

      Wife ordered something that when it arrived still had the label from China showing $1 when the cost was about £30. It was supposed to have been despatched from UK warehouse.

      Total bollocks despite all the noise from eBay and Amazon to stop this.

    3. phuzz Silver badge

      "what exactly is the point of these stores"

      So you can get an idea of what a particular phone looks like in the flesh (plastic), and how it feels in your hand etc.

      Then you go buy it from where-ever is cheapest.

      (The network stores are also handy when you need to pick up a new SIM today, rather than waiting for them to post you one).

      1. katrinab Silver badge

        Carphone Warehouse prices are usually pretty reasonable in my experience.

        As an example, The Moto G7 Plus is £239.99 at Carphone Warehouse vs £289.06 on Amazon.

        Laptops Direct sells it for £199.97 and describe it as "Grade A", which I presume means it is in some way substandard.

        Laptops Direct sell a G7 Power which is not described as Grade A, and it costs £159.99, same price as Carphone Warehouse. Amazon charge £159, so you save a massive 99p by buying there, but they claim you save £20 off some price that nobody else charges.

  4. Martin Summers Silver badge

    The last time I walked into a mobile phone store it was to get an upgrade because I was excited enough about the phone to get it there and then. That was probably 10 years ago now. I'm no longer excited enough by phones to care. I get everything I need online now sim free and pay on my own terms.

    Uniform big retail is dying on its ass all over the country, the successes now are niche shops that savvy individuals open where you can appreciate the unique products they offer and make an impulse buy. I won't be surprised if Carphone Warehouse retail is shut by the end of next year.

    1. John Brown (no body) Silver badge

      "Uniform big retail is dying on its ass all over the country, the successes now are niche shops that savvy individuals open where you can appreciate the unique products they offer and make an impulse buy. I won't be surprised if Carphone Warehouse retail is shut by the end of next year."

      Speaking of niche shops. I've just returned from the local shopping centre. New shop opened. Canine fertility clinic. WTF? Apart the fact it's really not the sort of area likely to be full of show winning pedigree dogs, why would anyone need one of these places? Dogs will hump anything in sight just for kicks!

      1. Ken Moorhouse Silver badge

        Re: Canine fertility clinic

        You might bump into Philip Green in there with some of his dogs.

    2. Anonymous Coward
      Anonymous Coward

      re. he last time I walked into a mobile phone store it was to get an upgrade

      I was reflecting on this, trying to think if I was EVER in a mobile phone store, and I was close to saying I never have been, but then, I'm wrong. It must have been around 2002 when I got, reluctantly, my first mobile (now I'm on my... fourth one, gosh!). And it was in a store, Virgin, if I remember correctly. That said, I went for pay as you go. Probably helped by the desperation of the bod trying to tell me a contract was the best motherfucking thing that would happen in my life. No and fuck off. The phone was 15 quid with a fiver included for calls, if I remember correctly. Well, it was my first and last brand-new handset. Ah, those were the days! ;)

    3. Gene Cash Silver badge
      FAIL

      > The last time I walked into a mobile phone store it was to get an upgrade

      Me too. They didn't have any in stock.

    4. phuzz Silver badge
      Thumb Up

      The last time I walked into a mobile phone store, it was because I'd just bought a new handset online, and I needed a different sized SIM.

      I could have waited a day for them to post a new one, then rung up and got it swapped, but it was quicker to just pop in on my lunch break, and give the bored kid in there something to do.

      Oh yeah, and if you have a small child who is jealous of mum/dad's phone, you could try asking a nearby phone store if they have any ex-display handsets they've not thrown away yet. Small kids love them.

  5. ISYS

    Shops?

    Isn't that where people used to go before the internet was invented?

  6. tiggity Silver badge

    the local phone shops do OK

    Cover "emergency needs" - youngsters can drop in a phone for inevitable screen repair (& maybe a case for next time!), people less bothered about "latest & greatest" can get SD cards, batteries to reinvigorate old phones, or if someone has a provider locked phone they can get it unlocked.

    If you do want a phone / contract, you can get them too.

    But for the sort of "box shifting / contract flogging" stuff Dixon's do, online does the job & no pushing you to take out insurance almost more costly than the phone .

    The move to SIM free, less frequent purchases has been discussed lots on else regarding over the years, most (probably all) commentards have more clue than Dixon's management about the phone market

    1. Hans Neeson-Bumpsadese Silver badge

      Re: the local phone shops do OK

      I always go to my local phone store when it's time for contract renewal and a new phone. It's not a large town and while the high street isn't dying it's definitely at the 'got a bit of a worrying cough' stage so I like to be able to support local employees (who are always friendly and helpful).

      Having said that, the local phone store in question isn't Dixons Carphone Curryhouse - I've been in a few of their branches, and I generally find the staff a bit surly, so I don't feel any inclination to support them.

  7. Anonymous Coward
    Anonymous Coward

    Dixons is a fantastic place to shop!

    No I'm not a Troll, but I have 13 years in a final salary pension scheme from many moons ago.

  8. Anonymous Coward
    Anonymous Coward

    They offshored their IT a decade ago

    Funny it hasn't helped their actual business!

    So..share price dropped?

    Good.

    1. MrMerrymaker Silver badge

      Re: They offshored their IT a decade ago

      I'd slag you off for your uncaring attitude, but I used to work there myself and CPW got rid of everyone to India (who were performing terribly and on less than four grand a year themselves).. So it was a bean counter decision, and I'd put money myself on nobody caring about IT when we all got made redundant!

      Proof positive surely - cutting IT costs does nothing over time to stabilise your bottom line. If your core business is flawed, your core business is flawed.

  9. Alimodo

    Fresh thinking required

    I sometimes find Curry/PcWorld useful. but they do need to buck up their ideas . They offer lots of stuff, in store and online but forget that some customers actually prefer to shop the traditional way. They go into a shop, get approached by a member of sales staff and get shown their item of interest. Get it wrapped, got to the cash desk ( that's the old term for checkout) and pay in cash. Now Currys have many options of how to buy from them, too many to mention here, but there is no option to reserve online and go collect and pay instore, it's order online, pay up front then collect. They need to look around as see how other retailers do things. Despite all their wonderful displays, it is hard to buy and take home on the same visit. Too many times have I heard, 'we don't actually have any in stock right now'.

    Complacency is to stagnate and if they do go under, then some other company will take their place, after all we don't miss the Comets or Travis Perkins.

    1. Anonymous Coward
      Anonymous Coward

      Re: Fresh thinking required

      Overpriced, dated kit that can always be found cheaper elsewhere.

      The only thing that keeps them going is their monopoly on the ingnorance of their customers.

      1. Anonymous Coward
        Anonymous Coward

        Re: Fresh thinking required

        Overpriced, dated kit that can always be found cheaper elsewhere.

        Since the demise of Maplin, I suspect these guys are the worst offenders now.

    2. MrMerrymaker Silver badge

      Re: Fresh thinking required

      Can you still buy gold plated audio cables?

      1. Arthur the cat Silver badge
        Facepalm

        Re: Fresh thinking required

        Can you still buy gold plated audio cables?

        Even better, gold plated HDMI cables.

        1. Anonymous Coward
          Boffin

          Re: Fresh thinking required

          You don't want the sharp edges on the ones catching on the wire and all the smooth zeroes squeezing past them. Gold has a much lower coefficient of friction for digits.

    3. katrinab Silver badge

      Re: Fresh thinking required

      If you do click&collect on an item that is in stock at the shop, you pay when you pick it up. If you get the item delivered to the shop, then you have to pay when you order.

  10. John Brown (no body) Silver badge

    Interesting reponse to a profit fall.

    So, turnover dropped a tiny bit to about £10.5B, profits dropped a bit of a chunk to "only" about £300M and the share price plummets. And yet there are dot coms out there that have been running for years, spaffing through £billions in losses every year but are still seen as valuable properties worth many billions?

    1. Anonymous Coward
      Anonymous Coward

      Re: Interesting reponse to a profit fall.

      'So, turnover dropped a tiny bit to about £10.5B, profits dropped a bit of a chunk to "only" about £300M and the share price plummets.'

      Merely making a profit is not sufficient for investors - you have to grow, and you have to meet or beat your financial predictions. Dixons Carphone had done neither, hence the share price fall.

      1. AMBxx Silver badge

        Re: Interesting reponse to a profit fall.

        Price changes in the short term are based on expectations, not actuals. If these results had been expected, the price would have dropped earlier.

  11. Anonymous Coward
    Anonymous Coward

    Why even bother buying on-line?

    My last 2 phones - 5 years ago and last month have both come from Argos because they usually have what I want in stock, it's the same price as everywhere else, they don't hassle you about pointless insurances, and I can walk there plus there's a decent pub on the walk home.

    Too be honest the pub nails the deal, the closest pub to my PC World is a bit rubbish.

    1. Anonymous Coward
      Pirate

      Re: Why even bother buying on-line?

      Argos, oh lol.

      Other than playing the Argos Lottery*, they arent up for much; they stopped being cheaper than the alternatives about 20 years ago, so what is the point of them??

      *Argos Lottery, where you pay for one item, but get given one worth substantially more.

      I have won three times, with win values running from £20 to £140 more than I paid.

    2. Doctor Syntax Silver badge
      Pint

      Re: Why even bother buying on-line?

      "I can walk there plus there's a decent pub on the walk home."

      If it's there on the way home it's also there on the way there. Cut out the middle man and just walk to the pub.

  12. Duffaboy
    Trollface

    Wanna buy a new phone ?

    Na, I got one last year

  13. Doctor Syntax Silver badge

    All these markets which look like they're growing exponentially aren't. It's really a sigmoidal growth curve. Yet every time folk are amazed to find it's levelled off. Every time.

  14. dank_army

    PcWorld - New Stores

    I think the group as a whole is making some really poor decisions which must be eating into their profits. Example - there is a fairly large retail park where I work, with at least two decent sized vacant premises. There is a mixture of clothing, food and places to eat. Couple of months and few hundred grand later - shiny new Pc World. But no, over the road is some crappy unit which was completely ripped apart, refurbished, new carpark made, many many months later they opened.

    I mean who are the morons making these decisions for the brand? Away from the main shopping centre, more than three times longer to open and more expensive?

    Oh and I went in there the other day - I was the only shopper there, apart from the enormous amount of sales staff trying to get me to buy something.

  15. Anonymous Coward
    Anonymous Coward

    Terrible shopping experience

    So they are called PC World 90% of the time the PC component shelves are out of stock (yes normally I buy online but emergencies do happen).

    Price/Spec labels on shelves are generally wrong.

    Staff are not trained on any of the products they sell.

    Demo products often not charged or plugged in (I even had to educate one staff member on which adapter to use to charge a speaker)

    Expensive Credit.

    If John Lewis can give you a free 5 year warranty, why are you trying to sell me an additional two years for the price of three

    In retail you can bet that the shopping experience is generally a reflection of the actual business and how it is run

    Anybody remember Woolworths in the UK, Shit shops and their head offices where just as tatty, just like decisions made from above, especially around IT.

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