Currys PC World operator Dixons Carphone is set to close 92 of its 650 stores in the wake of a profit warning on Tuesday morning.
Shares dropped by 20 per cent following the announcement that the company predicts profits to fall to £300 million in 2018/19. This is compared to £382 million in 2017/18 and £501 million in 2016/17.
In spite of the news, new CEO Alex Baldock said that he is not too concerned. "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."
The ex-Shop Direct boss also took the opportunity to slam the direction of former CEO Seb James who left the company in a surprise move at the turn of the year.
"We’re working at pace to set out a clear, much sharper vision for the business with much less dabbling in peripheral opportunities."
He also referred to the defunct HoneyBee software arm, along with the company’s joint venture with mobile provider Sprint.
"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."
In addition to investing £30 million to ‘correct recent underinvestment’ in its ‘colleague and customer proposition’, the company is shuttering 92 of its Carphone Warehouse standalone as ‘early action’ as a result of the expected drop in margins.
The company also said that this is a part of its budgeting for the electricals market to shrink: "We expect some cost increases in UK electricals, notably National Living Wage and IT depreciation, partially offset by gross margin recovery initiatives, including range optimisation, better availability and reduced levels of markdown."
In positive news, the company isn’t making redundancies, with staff from the closing stores moving into new roles.