April 29, 2020 / 9:09 AM / a month ago

Online throws Britain's Dixons Carphone a lockdown lifeline

LONDON (Reuters) - Dixons Carphone said that strong online sales were making up for around two-thirds of the store sales lost in Britain’s coronavirus lockdown on Wednesday, lifting its shares 15%.

FILE PHOTO: A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017. REUTERS/Neil Hall/File Photo

The electrical goods retailer said it planned for “zero contact” shops once restrictions ease and chief executive Alex Baldock said that the shift Dixons had seen to online shopping did not mean that outlets would be permanently closed.

“We expect to re-open the full 300 of the large stores in the UK,” he told Reuters by telephone.

Dixons shares jumped 15% to 79 pence at 0814 GMT, which Liberum analysts said reflected an improved position from the retailer’s last update at the end of March.

Online sales in the UK and Ireland for products connected to the lockdown such as computers for home working and fridges and breadmakers had risen by 166% in the five weeks to 25 April, the period of Britain’s lockdown, Dixons said.

Its stores in Britain would be ready to re-open under a zero-contact format from next week, the CEO said.

Once the government ends the lockdown and a green light is given, Dixons stores will open in a phased manner, with less than 100 opening on day one, Baldock added.

IN CAR SERVICE

Precautions will include gloves, masks and flexi-glass protective screens for cashiers, measures already proven and working in Dixons’ Nordic stores, which have stayed open.

Customers will also be able to wait in their car in Dixons car parks while a staff member places their order in their boot.

“We have the space to do this safely,” Baldock said, noting that most stores are on retail parks with large car parks.

The uncertainty caused by the pandemic, however, meant that the British-based group, which also has stores in Ireland, Scandinavia and Greece, would be scrapping its dividend.

That was part of a focus on strengthening its liquidity, which included extending its debt facilities, giving the group confidence however the rest of the year pans out.

“We have the liquidity we need under any plausible scenario of how the future might turn out,” Baldock said.

That future will be challenging, he said, predicting that customers will be spending less over the next six to 12 months as a recession takes hold and cuts their discretionary spending.

Reporting by Sarah Young; Editing by James Davey and Alexander Smith

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