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Dixons Carphone expands into US with Sprint joint venture Dixons Carphone expands into US with Sprint joint venture
(about 3 hours later)
Dixons Carphone is moving into America with plans for a chain of up to 500 stores after signing a joint venture deal with the US telecoms group Sprint.Dixons Carphone is moving into America with plans for a chain of up to 500 stores after signing a joint venture deal with the US telecoms group Sprint.
The move comes nearly three decades after Dixons’ ill-fated attempt to crack the notoriously difficult American market. It bought the Silo and Tipton electricals chains in 1987 and expanded rapidly. But Silo racked up millions of losses under Dixons’ management and was sold in 1993.The move comes nearly three decades after Dixons’ ill-fated attempt to crack the notoriously difficult American market. It bought the Silo and Tipton electricals chains in 1987 and expanded rapidly. But Silo racked up millions of losses under Dixons’ management and was sold in 1993.
Carphone has fared better across the Atlantic with its Best Buy joint venture although it had to close the Best Buy stores it set up in the UK because of poor sales. Carphone has fared better across the Atlantic with its Best Buy joint venture, although it had to close the Best Buy stores it set up in the UK because of poor sales.
This is the first deal for the group since it was created last year through the merger of electricals chain Dixons and mobile phone firm Carphone Warehouse. It also takes in the Currys and PC World chains. Sprint, Carphone’s rival until now, has nearly 60 million customers. Related: Pricey TVs spur double-digit growth at Dixons Carphone
This is the first deal for the group since it was created last year through the merger of electricals chain Dixons and mobile phone firm Carphone Warehouse. It also takes in the Currys and PC World chains. Sprint, Carphone’s rival until now, has nearly 60m customers.
In the initial phase, Dixons will supply mobile phone retail expertise to Sprint which will open 20 shops. If this trial goes well, the plan is for Dixons to invest $32m (£20m) and take a 50% stake in a joint venture with Sprint that will roll out up to 500 stores. The shops will be branded Sprint.In the initial phase, Dixons will supply mobile phone retail expertise to Sprint which will open 20 shops. If this trial goes well, the plan is for Dixons to invest $32m (£20m) and take a 50% stake in a joint venture with Sprint that will roll out up to 500 stores. The shops will be branded Sprint.
Chief executive Sebastian James tweeted: “Exciting to be back in the US with a deal we signed with Sprint late last night. Well done to the team. Good milestone for our CWS division.”Chief executive Sebastian James tweeted: “Exciting to be back in the US with a deal we signed with Sprint late last night. Well done to the team. Good milestone for our CWS division.”
Independent retail analyst Nick Bubb said: “You can’t keep Dixons away from the US ... The disastrous experience with the Silo electrical chain in the US in the 1990s is, of course, deeply etched on the Dixons corporate psyche, but more recently Carphone had a great deal of success with its venture with once-mighty Best Buy in the US and there is nothing to stop them now working with their former rival Sprint.”Independent retail analyst Nick Bubb said: “You can’t keep Dixons away from the US ... The disastrous experience with the Silo electrical chain in the US in the 1990s is, of course, deeply etched on the Dixons corporate psyche, but more recently Carphone had a great deal of success with its venture with once-mighty Best Buy in the US and there is nothing to stop them now working with their former rival Sprint.”
For many other British retailers the American dream turned sour. Tesco spent 20 years pondering a move into the US before setting up Fresh & Easy in California in 2007. However it misjudged its American customers and ignored much of its own research, and the failed chain Fresh & Easy filed for bankruptcy in 2013. The US foray cost the supermarket group nearly £2bn. For many other British retailers the American dream turned sour. Tesco spent 20 years pondering a move into the US before setting up Fresh & Easy in California in 2007. However, it misjudged its American customers and ignored much of its own research, and the failed chain Fresh & Easy filed for bankruptcy in 2013. The US foray cost the supermarket group nearly £2bn.
Marks & Spencer bought US clothing chain Brooks Brother and grocer Kings in 1988 and offloaded both in 2001 at a huge loss. Sainsbury’s fared better with its Shaw’s acquisition, which performed well despite some problems with US unions, but sold the chain to Albertsons for $2.5bn in 2004 to focus on its struggling UK business.Marks & Spencer bought US clothing chain Brooks Brother and grocer Kings in 1988 and offloaded both in 2001 at a huge loss. Sainsbury’s fared better with its Shaw’s acquisition, which performed well despite some problems with US unions, but sold the chain to Albertsons for $2.5bn in 2004 to focus on its struggling UK business.
WH Smith was hit by the the travel and retail downturn that followed the 9/11 terrorist attacks in 2001, and sold its stores in American hotels and airports.WH Smith was hit by the the travel and retail downturn that followed the 9/11 terrorist attacks in 2001, and sold its stores in American hotels and airports.