2nd Jul 2015 10:29
LONDON (Alliance News) - Dixons Carphone PLC on Thursday said its Connected World Services arm has signed a deal with US mobile carrier Sprint Corp to open and manage a number of Sprint-branded stores in the US.
Initially, FTSE 100-listed Dixons Carphone, formed of the merger of Dixons Retail and Carphone Warehouse, will supply mobile phone retail expertise to Sprint for 20 new stores. If successful, the scheme will then be rolled out further, with plans to open up to 500 stores.
In the second phase of the programme, Dixons Carphone will invest up to USD32 million to acquire a 50% stake in the joint venture with Sprint.
The news sent Dixons Carphone shares higher on Thursday and it was trading up 2.2% to 468.9 pence late morning, the best performer in the FTSE 100, as it has been throughout the morning.
"We are delighted to be working with Sprint and to be a part of a transformation in their business that is already making impressive headway. This is a very exciting venture for us, and is a significant step in growing our CWS business in the US. We bring specialist knowledge and skills to this partnership and will be looking to deliver innovation and outstanding customer service under the Sprint brand," said Andrew Harrison, Dixons Carphone's deputy chief executive and the chief executive of the Connected World Services division.
Connected World Services is Dixons Carphone's business-to-business arm, which aims to leverage the company's expertise, operating processes and technology to provide a range of services to businesses, and is part of its strategic plan to grow through service partnerships in the wider international area. The company is seeking to focus on markets in which it has a leading position but intends to enter other markets using the Connected World Services arm.
This push led to it disposing of assets earlier this year, including its The Phone House Deutschland GmbH business, which it sold to German mobile virtual network operator Drillisch AG in April. That was followed the same month by a deal to sell its 83% stake in The Phone House Netherlands BV to Relevant Holdings BV, a vehicle set up by Dutch telecoms retailer Optie1. In announcing the Dutch deal, Dixons Carphone said it will focus on developing its Connected World Services partnerships in the Netherlands.
In April, the company said that it was working to develop its Connected World Services partnerships in the Netherlands after announcing it would sell its 83% stake in The Phone House Netherlands BV to Relevant Holdings BV, a vehicle set up by Dutch telecoms retailer Optie1. It said it would focus initially on insurance and technical support services.
Earlier in April Dixons Carphone also said it would sell The Phone House Deutschland GmbH in Germany to Drillisch AG, who it signed a long-term contract with to provide insurance for.
Investec analyst Alistair Davies said the announcement should be taken positively by the market, given the emphasis Dixons Carphone is placing on Connected World Services as part of the long-term investment case. Davies said assuming a full roll-out, the deal will positively impact profit in three to four years, but will be neutral in years one and two.
Mike van Dulken, the head of research at Accendo Markets, said the potential for 500 stores in the US compares favourably to Dixons Carphone's current portfolio of 3,000 stores in 13 markets.
By Karolina Kaminska; [email protected] @KarolinaAllNews and Sam Unsted; [email protected]; @SamUAtAlliance
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