New stores planned as profits jump ahead of Carphone Warehouse-Dixons merger
The £3.8bn merger between Carphone Warehouse and Currys owner Dixons will see the first integrated stores launched within the next few months, Dixons' chief executive Sebastian James said yesterday.
Shares in both firms will cease trading on 5 August with the new Dixons Carphone shares launching two days later in a climate of improving consumer confidence according to Mr James, who claims to have fended off competition from the white goods firm AO World, which recently floated.
Mr James, who is set to take the helm of the merged group, said consumer confidence has increased in recent months. "I think we are seeing some glimmers of recovery, particularly to do with housing – white goods in particular. Long may that continue. We are not concerned by modest interest rates rises, it's about consumer sentiment that drives sales and that appears to be high," he said.
The first Carphone Warehouse stores inside a Currys PC World will be launched in the autumn, with a handful expected by the end of the year. The merger of equals between the two retailers will see savings of around £80m, with half from cost savings and half from placing shops in shops.
Both companies posted strong results yesterday, with Dixons' pre-tax profits up 53 per cent to £133m on sales up 3 per cent to £7.2bn. UK profits jumped 24 per cent and the World Cup has boosted sales of televisions, Mr James added, despite England's early exit.
Carphone Warehouse meanwhile said the roll-out of super-fast 4G mobile networks helped drive sales revenues more than 5 per cent higher to £3.28bn in the year to March as consumers pay more to upgrade to faster smartphones.
Its chief executive Andrew Harrison was bullish about the outlook, saying the completion of the merger with Dixons in August should mean Carphone is well placed for the launch of the next iPhone in the autumn.
Some analysts have fretted about reports that Britain's biggest mobile operator, EE, owner of T-Mobile and Orange, could stop selling through Carphone and focus on its own stores, but Mr Harrison played that down as "mischief".
He said EE's contract with Carphone is "not up for renewal" and that his plans to roll out 400 extra stores and the Dixons tie-up "provides even more compelling opportunities for our partners" to sell to customers.
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