Christmas on the high street could well be the worst for years. So it’s all the more surprising to hear Dixons Carphone chief executive Alex Baldock talk about his big bet. ‘We like shops,’ he says, reflecting on his £200 million business plan as we walk down a windswept pavement towards one of his Currys PC World stores.
‘High street, physical retail, definitely has a bright future if you are clear what it’s for and it’s relevant.’
He says he’s investing heavily – ‘a ton of money’ – including ‘tens of millions’ into the shops. ‘The challenge for us is how we knit online and stores together and we’re in the early stages of doing that. But the signs are quite promising.’
Optimist: Dixons Carphone chief executive Alex Baldock
Dixons – now trading as Currys PC World and Carphone Warehouse – has spent two decades trying to stay one step ahead of the online incursion. Throughout that time it has been firmly in the crosshairs of Amazon, which has been happily selling products at rock-bottom prices for very little profit.
Baldock, who arrived in April last year, oozes positivity. But it’s not blind optimism that drives him as much as an ambition to win with the hand he has been dealt.
The £10.4 billion group has more than 900 UK shops. But it’s the giant Currys PC World stores that are the profit generator and the focus for a 300-store makeover with ‘experience zones’ that showcase home cinema, smart home appliances and ‘gaming battlegrounds’.
‘This is not impulse stuff,’ Baldock says. ‘These are quite expensive, considered purchases that people want to experience before they buy: a laptop, a washing machine, a mobile phone or a TV. The investment is to make these stores exciting destinations. To draw customers in.’
It’s a relief, after all that, when we arrive at the Kensington store to find a steady stream of shoppers entering the building. Black Friday offers flash from screens in the windows. Many hard-bitten retailers have moaned the heavy discount event has blown a hole in profits. ‘I feel pragmatic about it. I’m not here whingeing about Black Friday. There is no sign of it going away. Apart from anything else, my job is to look after our customers and customers love it.
‘If I was overlord of UK Retail Plc, would I invent it?’ He pauses, leaving the question lingering in the air before giving a big hint: ‘It does bring challenges because this is the period when retailers used to sell everything at full price. But it also brings opportunities for us.
‘Rather than whining about it, my concern is to make sure that we win it. This is a two-and-a-half week period now so customers can take their time rather than being harassed into making a decision on a specific day.’
He points to an iPhone deal advertised in the window, ‘You won’t find a better deal than that this weekend.’ He says his 55-inch LG Ultra HD large screen TV for £1,099 is ‘an astonishing price – it’s over 200 quid off’. ‘Supersizing is a massive trend,’ he continues, adding that gaming is ‘huge in all its guises’. Smart homes, security, and ‘professional standard’ kitchen appliances are also big themes this Christmas.
He insists he will not be beaten on price, despite the shadow of Amazon. I suggest that small differences in product codes and specifications can short circuit this promise, which he waves away. ‘If you are not on the money, the customer will notice. It’s an unambiguous promise. If you find it cheaper we’ll refund the difference. With our heft with suppliers, we can stand by the promise that we just won’t be beaten on price by anyone: online or instore.’ Confidence seems to be seeping back into the company which Baldock said was ‘nowhere near’ fulfilling its potential when he arrived – a swipe at previous management.
ALLEX BALDOCK, 49: 4 KIDS, 2 DOGS, 1 HORSE
Family: Four ‘unruly’ children between 11 and 16 ‘keep my feet on the ground’. Married to Amy Roberts, former Mulberry designer who now runs a garden design company.
Interests: ‘We all love our horses.’ Alex’s horse is called Vialli. His fox-red labrador is called Zola and he has a Jack Russell terrier called JT – ‘named after John Terry, the former Chelsea captain’.
Role: Alex’s wife Amy was a Mulberry designer who now runs a garden design company
Lives: Notting Hill, West London, during the week and Somerset at weekends.
Previous jobs: Chief executive at Shop Direct; prior to that managing director of Lombard, a division of Royal Bank of Scotland; and commercial director at Barclays. Has a degree in Modern History from Worcester College, Oxford.
Working week: ‘I get five good hours a night and get up at 4.30 or 5am. It’s important to sleep well and I do sleep well. When I switch off at 11pm or midnight, I’ll read for a bit just to clear my mind and get some good kip.’
The mobile division, acquired in the much maligned merger with Carphone Warehouse, makes a loss. But the group is forecast to make £210 million profit this year.
Yet consumer confidence – and therefore spending in stores – remains ‘more depressed than you’d expect’, he admits. ‘That’s translated in our sector: the UK technology market is not growing.’
But sales in his stores are stable and he’s gaining market share online, with sales growing ‘at over 9 per cent, much faster than the online market at large’, he says.
He still appears to be doing more than his fair share of firefighting. Data for ten million customers leaked last summer. A £29 million Financial Conduct Authority fine in March for mis-selling insurance, albeit before 2015, and earlier this month accepting to the competition authorities that staff misled customers on warranty sales.
‘There’s always work to do. We take this super seriously. We’ve just gone through another round of training 21,000 colleagues on how to sell responsibly,’ he says adding that the business has ‘quadrupled’ training investment this year.
‘We do want to sell but we need to do it right and that’s why we are doing this hand in glove with the FCA and why we’re investing so much time and money in internal compliance and training,’ he says.
Baldock now wants to increase the amount sold on credit – double what it currently achieves. ‘It acts as a glue for more satisfied customers that keep coming back. I’m determined that helping customers afford and enjoy tech is going to be the strategy for years and make a sustainable success of Dixons Carphone.’
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