Dixons Carphone has confirmed that it will close all of its 531 Carphone Warehouse stores in the UK, making 2,900 people redundant in the process.
Carphone Warehouse has been haemorrhaging cash for some time and the 531 stores will close on the 3rd April 2020.
Carphone Warehouse was once a stalwart of the UK High Street but fell victim to its own business model, as consumers moved towards Sim only deals. This essentially scuppered Dixons Carphone's business model, which was leveraged on the sale of bundled handset and data contracts.
Carphone Warehouse had signed a number of deals with UK mobile operators, whereby it would have to pay compensation if it failed to hit its sales targets. Analysts estimate that if Dixons Carphone failed to hit its targets this year, it could be forced to pay up to £90 million in fines to UK mobile network operators.
The company will now focus on selling devices and contracts through its 305 Curry’s PCWorld stores across the country. The 531 stores that are to be shut, represent 8 per cent of Dixons Carphone’s total UK business.
Dixons Carphone PLC’s share price rose sharply on the news, as the markets reacted positively to the proposed closure of the stores. Shares rose from £62.46 on Monday 16th March to £71.48 on the afternoon of Tuesday 17th (UAE time).