Carphone Warehouse 2002 Annual Report Download - page 6

Higher quality
customers, higher
quality stores
Distribution performance reinforces our position as first
choice for mobile communications. Upgrading the store
portfolio across Europe will continue to drive growth.
Stores Total connections
(Retail and online)
(000’s)
4The Carphone Warehouse Group PLC Annual Report 2002
• 3.6 million connections
• Turnover of £1,061.6m (2001- £1,079.1m)
• Contribution £95.4m (2001- £101.2m)
Review of operations
Distribution
This year our Distribution division, comprising our retail operations,
online and insurance activities and our wholesaling business, has
continued its exceptional performance, strengthening its position in the
mobile market place across Europe.
Our Distribution business generated revenues of £1,061.6m and
contribution of £95.4m from the sale of mobile handsets, accessories
and other mobile telephony products and services.
The core retail and online businesses connected 3.6 million
customers in the twelve month period to 30 March 2002, showing a
marginal improvement on last year. Since the Western European handset
market is estimated to be down by 40%, this reflects a significant
increase in our market share.
The Carphone Warehouse has continued to grow its share of high
value subscription customers and connected 1.8 million of these
customers, compared to 1.6 million last year. This represents an increase
of 13%. Our retail like for like sales for the year were down 8%, although
like for like gross margin was only 1% behind last year.
Across the Group we have rationalised our retail operations and
updated the format and size of our stores, as well as standardising the
visual merchandising and point of sale material. Part of our
rationalisation has been the withdrawal from non-key markets and the
closure of over 100 under-performing stores.
Our store portfolio has however increased from 1,059 to 1,104,
having opened 154 new stores in the year. As such we have increased the
total average selling space during the year from 54,200 sqm to 60,800
sqm. Sales per sqm decreased from £11,350 to £10,200 in the year.
Significant focus has also been given in the year to the reorganisation
of our Pan-European retail operation. We have identified the need to
restructure and centralise certain functions with the aim of rolling out
best practice, reducing duplication and driving cost efficiencies. As a
result, the experience that we have gained from our more established
markets, especially the UK, is now being more rapidly adopted within our
mainland European operations. This is already showing encouraging
progress in terms of our in-store proposition and after sales offerings to
customers including the rapid roll out of repairs services, which are so
important in the highly penetrated mobile market.
This restructuring is also driving improved purchasing and logistical
efficiencies as well as cost savings from the introduction of shared
service processing centres. As a result our Pan-European operations are
in much better shape and continued improvement is intended in the
following twelve months.
Significant focus has been given to the
reorganisation of our Pan-European retail
operations, and as a result, the experience gained
in our more established markets is now being
more rapidly adopted across all our mainland
European operations
On an individual country basis, our business in the UK, where we now
have 461 stores, continues to thrive. We opened 69 new stores during the
period, considerably increasing our retailing presence and our market
share of new connections and upgrades.
In France we have extended our store portfolio to 151 and we have
also increased the number of express repair centres. Our business in
France continues to benefit from the good relationship that it
Subscription connections
(Retail and online)
(000’s)
98 99 00 01 02
161
566
824
1,059 1,104
00 01 02
1,097
1,557
1,767
98 99 00 01 02
461
1,082
2,081
3,603 3,615