Carphone Warehouse has said its partnership with Best Buy will enable it to offset challenges presented by the downturn, after it reported a cautious outlook because of falling broadband demand.
In Carphone Warehouse’s preliminary results, chief executive Charles Dunstone said: “Our venture with Best Buy will enable us to adapt our business to our customers’ changing needs better and more quickly than we could on our own.”
The retailer said that, while it remained cautious about the year ahead because of decreasing demand for broadband, mobile phone connections were up 15 per cent for the year to March 29.
However, Carphone's net customer additions in its broadband sector were lower than expected because of the slowdown in the housing market and strong demand for “dongles” – mobile broadband services that allow customers to access the internet without a fixed line.
“If these trends continue, we expect lower revenue growth this year than indicated previously, compensated by improved margins,” Dunstone said of Carphone Warehouse’s fixed-line business.
Pre-tax profits at the group were up 75 per cent to£216 million for the year to March 29. Sales rose 12 per cent to£4.47 billion. Like-for-like retail revenue was up 2.8 per cent. Carphone opened 267 net stores during the year.
Dunstone said the joint venture with US electricals giant Best Buy – which snapped up 50 per cent of Carphone Warehouse’s retail division for£1.1 billion last month – offers the group a “phenomenal opportunity”. He said: “We can accelerate the evolution of our existing retail business and enter a major new market, where Best Buy has a superb track record of value creation.”
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