14 DAY TRIAL // Dixons Carphone has recently announced that it’s closing all standalone stores in the United Kingdom, with some 2,900 people to be left jobless following this decision.
The company explains that this radical change of strategy, which involves focusing more on online stores, isn’t necessarily caused by the COVID-19 outbreak, but by recent performance figures.
Of course, the coronavirus spreading across the UK also played a role in this, and Dixons Carphone says they expect an impact in the coming months.
The company will continue to sell mobile devices and other products in 305 Currys PCWorld stores and online, but other than that, no less than 531 standalone stores would be closed. Approximately 1,800 employees, which represent 40 percent of the staff affected by this decision, would receive new roles internally, they claim, but 2,900 workers will be left without a job.
“There’s never an easy time for an announcement like this, but the turbulent times ahead only underline the importance of acting now,” Alex Baldock, Group Chief Executive, explains.
“So customers are increasingly heading, not just to our large and growing online business, but into our big stores, where they can find all the experts and tech - mobiles, computers, TVs, smart tech, appliances, gaming and all the rest - they need. But they can’t find all this in the small mobile-only stores that are one twentieth of the size; they’re visiting these less and these stores are losing more money as a result.”
Sales of Travel stores collapsed
The impact of the coronavirus on the available inventory has been limited, the company explains, and online sales have obviously been strong lately, driven by fridges, freezers, small domestic appliances, and laptops.
Travel stores, on the other hand, have been “severely impacted,” especially as the number of passengers dropped substantially in the last few weeks. The company expects an impact of about 5 million British pounds in this unit alone.
“We are aware that our stores could experience a significant reduction in sales in the months ahead and we are modelling a range of downside scenarios and planning accordingly. We are ready to switch more fulfilment to our online and direct channels and we will manage our costs and cash closely, including a tight control of capital expenditure if necessary,” the company says.