Dixons Carphone, formed last year from the merger of Dixons
Retail and Carphone Warehouse, said on Thursday its
business-to-business division, Connected World Services (CWS),
had signed the deal with Sprint, which has about 60 million
customers in the United States.
Shares in Dixons Carphone, already up a quarter over the last
nine months, rose as much as 4.7 percent.
"For Dixons Carphone, the deal with Sprint allows the company to
dip its toe in the waters of a U.S. market that, while
competitive, is certainly compelling in terms of scale," said
Neil Saunders of retail research group Conlumino.
A first phase of the deal will see CWS supply mobile phone
retail expertise and proprietary knowledge to Sprint, which will
open about 20 retail stores.
If these stores prove successful a second phase would see
CWS invest $32 million in a 50/50 joint venture that could
potentially roll-out 500 stores. Dixons Carphone will also
provide support across the whole of the Sprint estate.
Analysts said if the second phase was enacted it could be a
springboard for Dixons Carphone to further expand into digital
consumer electronics in the United States.
Investec analyst Alistair Davies said a full roll-out could
imply a 6-7 percent upgrade to Dixons Carphone's profit numbers
in the future.
"This is a very exciting venture for us, and is a significant
step in growing our CWS business in the U.S.," said Andrew
Harrison, Dixons Carphone deputy group CEO.
Both sides of the merged group are no strangers to the U.S.
market. Dixons owned the Silo consumer electronics chain in the
1990s, while more recently Carphone Warehouse had a joint
venture with U.S. group Best Buy <BBY.N>.
Dixons Carphone shares were up 6.4 pence at 465.5 pence at 1058
GMT (6:58 a.m. EDT), valuing the business at 5.4 billion pounds.
($1 = 0.6407 pounds)
(Reporting by James Davey; Editing by Sarah Young and Mark
Potter)
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