Dixons Carphone said it would shut 92 Carphone Warehouse standalone stores this year as it grapples with changing consumer habits.
Shares in the group, which have already lost 30 percent of their value in the past year, tumbled by 20 percent as it warned profits would fall well below City forecasts this year, at £300 million. Analysts had been expecting about £387 million.
The group said hard-pressed consumers were holding on to older mobile devices for longer and going “sim-only”, which has dented the group’s performance. But it said no jobs would be lost as staff will be offered the chance to move to larger outlets nearby.
Alex Baldock, who replaced the longstanding chief executive Seb James earlier this year, said: “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.”
Baldock added that he is renegotiating contracts at Carphone Warehouse with the aim of “improving our business model” while pointing to a difficult market for electrical goods.