Electrical retailer Dixons Carphone is expecting record Boxing Day sales even after experiencing its busiest day ever on Black Friday.
Sebastian James, chief executive of the group that owns Currys, PC World and Carphone Warehouse in the UK, said Christmas now had “twin peaks”. He admitted the company was experiencing a lull before the traditionally busy Boxing Day sales but said he was “optimistic” that the group would see revenue growth over the whole festive period.
“I said last year that Christmas is a two humped camel and the humps have got higher and the gaps lower,” he said.
The group sold five items a second online during the peak period between 8am and 9am on Black Friday – the US inspired discount day, which fell on 27 November this year – up 56% on last year. TVs, NutriBullets and fitness trackers sold well, helping the company grab market share from rivals including Argos, which suffered from delivery problems over the Black Friday period.
James said the groups’ stores in Nordic countries and southern Europe as well as the UK had enjoyed their biggest days trading ever as the Black Friday phenomena spread across the continent.
He said that there had been a sharp rise in the number of people making purchases online, but just under half of those had chosen to pick their items up in stores so that close to 80% of Black Friday shoppers had entered stores at some point. Dixons’ experience runs counter to reports that online retailers’ enjoyed the bulk of Black Friday sales. “Stores are still a critical part of the distribution channel,” James said.
The Dixons Carphone boss commented on the strong Black Friday trading as the group revealed better than expected profits for the first half of its financial year.
Underlying pre-tax profit for the six months to the end of October rose 23% to £121m as UK sales boomed, beating analysts’ average forecast of £111m. Televisions and white goods such as fridges sold well, making up for weaker sales of tablet computers and laptops.
Sales at established UK and Irish stores rose 4% in the three months to the end of October, a slow down from the previous quarter. But profits in the UK soared 31% to £101m as it cut costs, and improved efficiency, partly by merging the head offices of the formerly separate Dixons and Carphone Warehouse groups.
Currys, PC World and Carphone Warehouse stores are also being merged into single units. The group is closing 20-30 stores a year with an aim to reduce its portfolio of 400 outlets to just over 300 over time.
With a week until Christmas, analysts homed in on Dixon’s comments about recent trading. The shares rose as much as 5% to a record high of 500p and were up 1.76% to 485p by the end of the day.
The company, formed from the merger of Dixons and Carphone Warehouse last year, also announced a board revamp. Lord Livingston, the former chief executive of BT and Conservative trade minister, has become deputy chairman, replacing Roger Taylor, the former Carphone Warehouse boss.
Livingston’s appointment is his second board job this week after he was announced as chairman of Man Group, the hedge fund. He started his retail career at Dixons in the early 1990s and became finance director before moving to BT.
Tony DeNunzio, chairman of Pets at Home and the former boss of Asda, has joined as a non-executive director, replacing John Gildersleeve.
