UK phone retailer Carphone Warehouse is closing its 531 standalone stores, its parent company Dixons Carphone announced today. Although the company said 40 percent of the retailer’s employees will be reassigned within the business, the move is expected to result in the loss of 2,900 jobs. The company’s phone sales will move both online, and to Carphone-branded areas within the company’s larger Currys PCWorld shops.
In its announcement, Dixons Carphone blamed changing consumer habits for the shift, and expects its mobile division to lose around £90 million ($109 million) this year. Its customers are reportedly replacing their phones less often (carriers in the US have reported a similar trend), and they’re also buying them unencumbered by carrier contracts or as part of flexible bundles. The company added that customers also seem to want to shop in bigger electronics stores, rather than the small high street shops that were Carphone Warehouse’s staple.
The company said the restructuring is likely to cost it around £220 million, and eventually hopes that its mobile business will break even by the 2021/22 financial year.
The COVID-19 outbreak is likely to make this a difficult time for any affected employees to find new jobs. “There’s never an easy time for an announcement like this, but the turbulent times ahead only underline the importance of acting now,” the group’s chief executive, Alex Baldock, said in a statement. “We’ll pay enhanced redundancy, any bonuses, honour their share awards, and help them find new jobs through an outplacement programme.”
While the closures are not the result of COVID-19, the company says that it expects the outbreak to have an impact on its business going forward. The worst hit area is likely to be its airport-based Dixons Travel stores, which sell electronics to travellers. However, the company added that it expects to sell more domestic appliances and laptops as people start spending more time at home.