“* Could open 30-50 larger, hi-tech stores by end 2009
* Could upgrade up to 200 existing larger stores
* Current retail conditions “challenging”
* Hasn’t reached a decision on possible demerger
(Adds more quotes, details, background)
By Mark Potter and Kate Holton
LONDON, Nov 4 (Reuters) – Britain’s Carphone Warehouse could open up to 50 new hi-tech stores by the end of 2009, in addition to the megastores it is planning with U.S. retailer Best Buy, as it looks to extend its reach in electrical goods, its finance chief told Reuters on Tuesday.
Roger Taylor was speaking from the first of the new stores, at the new Westfield shopping centre in London, which he said became the group’s most visited store on just its third day open.
From its roots in mobile phone retailing, Carphone branched into selling laptops earlier this year and its new store format includes areas for gaming as well as convergence technologies that link televisions, computers and other electrical devices.
It is larger than traditional Carphone outlets, at about 3,000 square feet, but smaller than the 30,000 square feet megastores the group is planning with Best Buy, the first of which is also due to open next year, for a big push into the UK and mainland Europe’s electrical goods markets.
“We see the Best Buy environment being very similar … with this dropping right into the heart of it, Taylor said.
He conceded that trading conditions were currently “challenging,” and there was little sign of a near-term improvement, but said the group was investing for the future.
“We’re thinking two, three, four years ahead around what we can provide and how it will change the consumer environment in this space,” Taylor said in an interview.
Carphone is opening four new format stores in the UK as part of a trial, but could rapidly build on that number.
“Across Europe, we could end up with thirty to fifty of this new format from a standing start. I can see that by the end of 2009,” Taylor said, adding the group could also convert up to 200 of its larger existing stores.
“Will we get it all done by the end of 2009, I don’t know. But you’ll see that progress going through 2009 and into the following year.”
For the group’s remaining 2,200 or so stores, Taylor said Carphone could introduce some of the new product ranges, depending on their performance.
SUBSIDISING HARDWARE
Taylor said the group was also extending its model of subsidising hardware in exchange for a customer subscription to its new ranges. So a subscriber to its broadband service could choose a free games console, and a new sign-up to its TV package with Virgin Media could include a new LCD television.
Carphone’s model of subsidising hardware has seen it grab over 10 percent of the UK laptop market already, Taylor said.
He declined to say how much Carphone might spend on the new format stores, but said it would fall within the group’s usual plan to invest a third of EBITDA (earnings before interest, tax, depreciation and amortisation) at its retail business.
Taylor said staff would be trained on new product ranges at the group’s new Technology Academy, and that its Geek Squad advice centres for customers would also be prominent in store.
Carphone is Europe’s biggest mobile phone retailer and one of Britain’s largest fixed line and broadband telecoms groups.
Taylor declined to comment on news that rival BSkyB is in talks to buy the UK business of Italian broadband operator Tiscali SpA, which Carphone has also been linked with.
“Sometimes, in harder times … investing in your organic opportunities actually is more exciting and more rewarding,” Taylor said.
Carphone founder and Chief Executive Charles Dunstone has signalled that the group might one day separate its retail and telecoms businesses.
“We run our business as two distinct businesses … but at this stage we haven’t concluded any view on that (a possible demerger),” Taylor said.
At 1125 GMT, Carphone shares were up 5.25 percent at 148 pence, valuing the firm at nearly 1.4 billion pounds ($2.2 billion). ($1=.6322 pounds) (Editing by Greg Mahlich)”
Posted by: Monica Hao 00b
I think that I would be much expensive. But it would be more challenging to the company. I think it will help the company in communicating with their staff.
