Carphone set to open Best Buy stores as it splits in two - Business News - Business - The Independent

Carphone set to open Best Buy stores as it splits in two

TalkTalk broadband unit to be hived off into separately listed company

Carphone Warehouse is to split its retail and broadband internet operations into two separately listed companies, as its joint venture with the US electronics group Best Buy revealed it had all but signed off lease agreements to open five big electricals stores in the spring of 2010.

Charles Dunstone, the chief executive of Carphone Warehouse, declined to set out a timeline for the demerger – which will split its TalkTalk broadband business from its 2,400 retail stores, which will become part of the Best Buy Europe joint venture – but the cost and reallocation of the group's £925m credit facility is likely to delay the split until next year.

He added that the "operational separation of the two businesses has already effectively been achieved".

The confirmation of the widely expected demerger came as Carphone Warehouse, which has net debt of £180m, posted a robust fourth-quarter trading statement and said it would meet market expectations for full-year headline profits.

Mr Dunstone will become the chairman of each of the demerged businesses, but major shareholders will be consulted on the break-up. The dual role may raise some eyebrows in the City, as best-practice corporate governance procedures argue against one person holding more than one FTSE 100 chairmanship. But both companies are likely to be members of the FTSE 250 index, in which case the split should not be an issue.

Andy Wade, analyst at Numis Securities, said: "I cannot see after all these years and with his intimate knowledge of both businesses how he could not be involved in both of them."

Both businesses now have markedly different investment profiles, limited synergies and actually have some conflicts of interest, given that the retail division works with mobile service providers, offering impartial advice to customers, while TalkTalk competes against the same providers.

Best Buy Europe yesterday put further flesh on the bones of its eagerly anticipated, but delayed, launch of the first of Best Buy's electrical stores in the UK next spring. Roger Taylor, the chief executive of Best Buy Europe, said it had internally signed off lease agreements on five UK sites, which are now set to open in quick succession next year.

However, Best Buy Europe declined to provide dates and locations. It did reveal that UK retail rents had plummeted to a level that were on a par with those in the US, whereas previously they have been twice as high on these shores.

A Carphone Warehouse spokesman said: "These stores will be effectively launching on US rents."

He added that the lower UK rents on stores sized between 30,000 and 50,000 square feet will be equal to about a 2 per cent improvement in gross margins.

The group wants to open about 100 Best Buy stores in Europe by 2013, of which it expects between 60 and 70 will be in the UK.

In response to the threat from Best Buy, DSGi, the owner of Currys, is to open five major stores this year after a successful trial at Junction 9, near Birmingham.

Yesterday, Best Buy Europe said its mobile phone connections jumped by 12 per cent to 3 million over the three months to March 2009.

Its pre-pay connections soared by 20 per cent, while subscriptions were up by 2 per cent to 1.1 million, helped by continued strong demand for the iPhone, other smartphones and for mobile broadband.

TalkTalk added 74,000 net new broadband customers, taking its total subscriber base to 2.8 million. Carphone said it had increased its operating free cash flow across its divisions to £150m, which was welcomed by investors.

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
PROMOTED VIDEO
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
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

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week