1,000 jobs at risk in Carphone Warehouse move

 

More than 1,000 jobs were in jeopardy today after a push by Carphone Warehouse and America's Best Buy to crack the UK electronics market ended in failure.

Best Buy's 11 "big box" stores will close by the end of 2011 after it made losses of £46.7 million in the six months to September and Carphone said current trading conditions meant the venture did not have a viable future.

Carphone and its partner Best Buy launched their joint-venture in 2008 with a promise to shake up a market dominated by Currys and PC World owner Dixons Retail and Comet, although the first store did not open until 2010.

Best Buy originally planned 200 stores in Europe by 2013, and hoped to undercut the competition on price and offer American-style customer service.

Despite a £1.1 billion investment, its launch coincided with the downturn, which saw a substantial drop in demand for sales of TVs, video consoles and computers, while the growing popularity of the internet added to its woes.

Other retailers such as Comet owner Kesa Electricals and Dixons have issued profit warnings in recent months.

Carphone said it hopes to find work for the "large majority" of 1,100 staff within its 805 stores in the UK, which are increasingly focusing on selling more electrical goods such as smartphones and tablet computers, particularly through its Wireless World format.

Best Buy Europe chief executive Andrew Harrison said: "The technology world has changed substantially since 2008 and we are confident we will best serve our customers by investing in a single brand and format rather than two."

Best Buy UK currently has big box stores in Aintree, Bristol, Croydon, Derby, Enfield, Hayes, Hedge End, Merry Hill, Nottingham, Rotherham and Thurrock.

Best Buy UK expects further losses of between £25 million and £30 million before the shops are closed. The cost of closing the stores will be up to £75 million, while write-downs of £45 million in the value of the business are also expected.

Kate Calvert, an analyst at Seymour Pierce, said: "It's been incredibly difficult for anyone to make any money out of electricals in recent years.

"They tried to launch at a very difficult time - anything that involves selling big-ticket items at the moment is a struggle."

She added that Carphone also lost the element of surprise by flagging up its launch in advance, giving rivals such as Dixons time to sharpen their offers.

Meanwhile, Carphone also announced it had sold its share in Best Buy Mobile, its US mobile phones joint-venture with Best Buy, for £838 million.

The sale will trigger a £235.8 million pay-out for Carphone Warehouse founder Charles Dunstone, who owns a 29% stake in the company.

Carphone also reported that its European business suffered a 3.9% like-for-like sales decline in the half-year.

It said the pre-paid mobile phone market remained weak and it had suffered as more customers moved on to 24-month contracts in the UK. Underlying profits at the division more than halved to £20 million.

PA

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress among those on 'master list' of massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
Arts and Entertainment
The eyes have it: Kate Bush
music
PROMOTED VIDEO
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
Al Pacino in ‘The Humbling’, as an ageing actor
filmHam among the brilliance as actor premieres two films at festival
News
Fifi Trixibelle Geldof with her mother, Paula Yates, in 1985
people
Arts and Entertainment
Downton Abbey fans rejoice, series five returns later this month
TV
News
i100
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Application Support Analyst / Junior SQL Server DBA

£40000 - £45000 per annum: Ashdown Group: An established professional services...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Business Development Manager / Media Sales Exec

£28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...

C# .NET Developer (PHP, Ruby, Open Source, Blogs)

£40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor