Dixons Carphone is cutting 400 jobs in the wake of the merger between the two retailers.
As the retailer hailed a “barnstorming” performance at its UK and Irish stores in its maiden half-year results, it said 20% of the combined total of head office staff would be leaving.
Seb James, chief executive of the mobile phone and electrical goods retailer, said many of those leaving would be Dixons staff who did not want to make the move from Hemel Hempstead in Hertfordshire to the new offices in Acton, west London. The move is expected to be completed between May and October next year. The group was created by a merger between Carphone Warehouse and Dixons, the owner of Currys/PC World, this summer.
A further 400 jobs could go as the group said it was examining whether to restructure other parts of the business including its Dutch, German, and Portuguese operations.
However, the company, which employs around 40,000 people across Europe, said it still expected to generate new jobs overall, potentially adding a net 800 new roles as it expands.
James set an upbeat tone as he said the company had enjoyed exceptionally strong trading on the Black Friday promotional shopping day last month.
“Black Friday was a hit, good fun and slightly mad,” he said. “It was bigger than we expected by quite a long way and puts us in good shape for Christmas in the UK.”
James said Black Friday had almost certainly overtaken Boxing Day to become the busiest day of the year for electricals retailers and that next year would only see more of the high street getting involved. “I suspect next year we will see all the fashion houses do Black Friday,” he said.
James said the company had run out of stock of the promotional items intended for Black Friday and been forced to dip into its supplies lined up for the Boxing Day sales and order extra production for this month. Demand via Currys/PC World’s websites for large-screen Samsung TVs, DeLonghi coffee machines and Hotpoint washing machines on Black Friday was five times that ever seen before with some shoppers queuing for up to an hour to place orders.
James said it was not yet clear whether Black Friday had added to the total value of sales for the Christmas season or merely pulled them forward. But he said: “For the industry as a whole it’s some quite refreshing having got a chunk of Christmas in the bag.”
The promotions had been planned well in advance, as the company worked with manufacturers to secure supplies of products that could be sold at a bargain price. As a consequence, profit margins were only slightly lower than on regular items. He said Dixons Carphone had exported a modest version of Black Friday to its Nordic and Spanish stores this year and expected a much bigger take up across Europe in 2015.
Asked if Black Friday was here to stay he said: “I think it could be here forever. It’s a good promotional item and we are planning next year now.”
Dixons Carphone, which is now worth £5bn, said like-for-like sales were up 11% in its most recent trading quarter, while group profits rose 30% to £78m in the half-year to 1 November. It said white goods and televisions sold well in Currys and PC World stores, driven by demand for high-end TVs owing to initiatives such as free warranties.
