Carphone Warehouse yesterday hired Hans Snook, the charismatic founder of the mobile operator Orange, to be its new chairman as it announced plans to shut 89 of its weakest stores under a restructuring programme.
Charles Dunstone, the current chairman and chief executive of the mobile phone retailer, will move to the position of chief executive when Mr Snook joins in a non-executive capacity on 1 May.
"The opportunity to work with Charles was actually irresistable. I can't honestly think of any other telecoms company that I would have joined," Mr Snook said.
The Orange founder, who stepped back from the mobile phone business when it floated on the stock market early last year, said he planned to spend 4 to 6 days a month at Carphone and would also be buying shares in the business.
The move came as Carphone announced plans to close 89 of its less profitable stores, including 30 in Germany and seven in Belgium, and open 100 new stores over the coming year.
The restructuring will cost the company £32m this year, of which £20m relates specifically to the store closure programme, but is expected to produce annualised savings of about £7m.
"We're getting on with it. We said we're not going to let this thing sit there and continue to do badly, we'll take action. That's what we're doing," Mr Dunstone said. "We'll still open more stores than we close during the year. We'll still be recruiting."
In addition, the company said pre-tax profits, before the amortisation of goodwill and exceptional items, would be £45m to £50m in the year to 30 March 2002. Shares in the company closed up 3p at 94p.
Mr Dunstone said he was "confident" the company's performance over the coming year would show a "significant" improvement on last year.
"We wanted to reassure people that we weren't a hostage to technology being on time and working. There's a lot of upside if it does," he said. "I don't want to say to my shareholders, it'll be OK if this stuff turns up on time. I think we've got a responsibility to deliver them earnings growth even if it doesn't."
In addition, Carphone said yesterday it planned to sell and lease back its support centre in Acton – a move expected to generate a £16m profit and in excess of £36m cash.
It also said it would write down the value of its investment in a wireless internet fund, in which it has a 71 per cent stake, to £25m from about £40m.
The company estimates its restructuring overall, including a previously announced reorganisation at MViva, will force it to make a £38m exceptional charge in its current year results.
Despite the shake-up, Mr Snook stood by his hopes for the mobile phone industry in general, saying he was still committed to "driving the wire-free future" he has long spoken of.
"Everybody will have a mobile device or some sort or another. You can buy things, sell things. It'll be the electronic purse of the future," he said. "I'm committed to the future. Not just at Carphone but the whole mobile industry."
Mr Snook, who has also long been keen to get a foothold in the alternative medicine market, said yesterday he was still considering such a move.
"I'm still keeping contact with a lot of people, looking at a lot of different things. It's something that's new, that's got to develop. I haven't quite decided where to put my oar in exactly but I'm not in a rush."Reuse content