Dixons Carphone is to close 92 Carphone Warehouse stores in response to falling sales as mobile phone users hold on to their devices for longer and opt for short-term and SIM-only deals - which are much less profitable for Carphone Warehouse - rather than long contracts.
The company had warned of this trend last year when it claimed that increasingly expensive flagship smartphones were turning customers off.
However, the company claimed that no jobs would be lost as staff are transferred to nearby branches to help improve customer service.
The news was disclosed today as the company released its trading update, which indicated that the company is forecasting a sharp decline in profit-before-tax.
From a figure of £501 million in the year to the end of April 2017, the company has warned that profit-before-tax will drop to £382 million in the year to the end of April 2018, and is forecasting £300 million for the current financial year.
The statement suggested that the company expects a "further contraction" in the UK electricals market and "market and contractual pressures" in the mobile retail sector, including "lower levels of inflation in mobile customer bills" reducing anticipated income growth by around £15 million.
The cost-cutting move comes just five months after the company appointed Alex Baldock as its new CEO, leading some in the City to suggest that Baldock was ‘kitchen sinking' - throwing in as much bad news right at the start of his tenure in order to make the rest of it look better.
Baldock said: "Eight weeks in the business have cemented my optimism about Dixons Carphone's long-term prospects. I've found exceptional strengths, and though there's plenty to fix, it's all fixable.
"Right now, with our international business in good shape, we're focusing early action on the UK. In electricals, we're focused on gross margin recovery. In mobile, we're stabilising our performance through improvements to our proposition and network agreements. In both, we'll work hard to improve our cost efficiency.
"We won't tolerate our current performance in mobile, or as a group. We know we can do a lot better."
Carphone Warehouse and Dixons merged in 2014 to form Dixons Carphone. Dixons, of course, is the former camera retailer turned electrical retailer that acquired Currys in the 1980s, and the company behind PC World in 1993.
The Dixons brand name was largely ditched in 2006.
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