Carphone’s ‘wireless world’ to grow as it readies for Best Buy

At present there are 21 wireless world shops, which carry a wider range of products such as laptops and wireless TVs than the retailer’s usual stores. They are also bigger, measuring between 1,615 sq ft and 3,230 sq ft compared with the 540 sq ft and 645 sq ft typical of Carphone stores.

As it posted interim results last week Carphone said it wants between 40 and 50 wireless world stores by the end of the year through a mix of refits and openings.

The retailer reported: “Both sales performance and customer feedback have been very positive. We plan on accelerating roll-out in the next financial year.”

Carphone also revealed its share of full-year net income and earnings from Best Buy Europe will be at the top end of expectations. Chief executive Charles Dunstone said Carphone’s share of earnings is likely to be between £30m and £40m.

Sales at Best Buy Europe, a 50:50 joint venture between Carphone and US electricals powerhouse Best Buy, rose 4% to £1.67bn (on a 100% basis) in the six months to September 30, when EBITDA rose 7% to £79m. Like-for-likes climbed 3.1% but fell 0.9% on a constant currency basis.

Dunstone also said it is on track to open big-box Best Buy stores next spring. He said: “Our guidance for Best Buy-branded big-box store openings remains unchanged. We remain fully on track to open our first stores in spring 2010 and are making good progress in finalising further store openings.

The retailer said plans to demerge retail and broadband operations for the business by the end of March 2010 are proceeding to plan and banking facilities have been agreed.

UBS analyst Nick Lyall said “the revision to structure is positive, as a standalone Talk Talk could prove an attractive acquisition target”.
He added: “We believe that Talk Talk’s large share of UK broadband subscribers and unbundling knowledge could prove very attractive to Sky or the UK mobile operators.”

Lyall said Talk Talk Group has secured £650m of banking facilities, which the business said ensures that Talk Talk and Carphone Warehouse have covered their anticipated medium term funding requirements, and Best Buy Europe has agreed a standalone banking facility of £350m.