Carphone Warehouse

The Carphone Warehouse Limited
Private limited company
Industry Telecommunications
Founded 1989
Founder Charles Dunstone and Julian Brownlie
Headquarters North Acton, London, United Kingdom
Key people
 Sir Charles Dunstone (Chairman)
Andrew Harrison (CEO)
Products Home and Mobile telephone
equipment and services
Revenue £10.7 million (2013)[1]
£57.1 million (2013)[1]
£4.2 million (2013)[1]
Number of employees
 over 11,500[2]
Parent Dixons Carphone
Slogan We Compare, You Save.
Website www.carphonewarehouse.com

Carphone Warehouse is a British mobile phone retailer, with over 2,400 stores across Europe. It trades as Carphone Warehouse in the United Kingdom and Ireland, and as Phone House elsewhere.

The company has been a subsidiary of Dixons Carphone since 7 August 2014, which was formed by the merger of its former parent Carphone Warehouse Group with Dixons Retail. Carphone Warehouse Group was listed on the London Stock Exchange and was a constituent of the FTSE 250 Index.

History

Foundation

The company was co-founded in 1989, when most portable phones were too bulky to carry and called car phones, by current Chairman Sir Charles Dunstone and Julian Brownlie. Brownlie and Dunstone put £6,000 into the company from their savings. In 1990 Dunstone then called his old school friend and Chartered Accountant David Ross,[3] who agreed to become Finance Director. Based originally in Dunstone's rented flat on the Marylebone Road, London, four years later the company had grown to 20 stores.

Taking on a third partner

While Dunstone became the public face of the Carphone Warehouse, David Ross (described by Dunstone as his "secret weapon"),[4] developed and drove the high street retail footprint of the company by buying Tandy in the United Kingdom for £9 million in January 1999.[5] Dunstone approached old customer Guy Johnson of NEC UK – later described by one City analyst as "the Ringo Starr of Carphone Warehouse" for being in the right place at the right time[6] – to become the third partner, later taking up the role of Logistics and Distribution director.[7]

David Ross led the footprint development of the company, under The Phone House brand, across Europe and the United States.[8]

Public flotation

Former Carphone Warehouse Group plc logo in use until 2014 merger with Dixons Retail plc

When the IPO of Carphone Warehouse took place in 2000 Charles Dunstone owned half, David Ross a third, and Johnson most of the rest.[9]

Charles Dunstone takes control

Johnson sold the majority of his stake in 2001 and retired with his young family to his holiday home in Portugal.[7]

Carphone Warehouse bought Opal Telecom in 2002, and in 2003 launched the TalkTalk brand.

While David Ross had been joint-Chief Operating Officer with Charles Dunstone from 1990 and 2003, whereas Dunstone stayed with the business that he still runs today, Ross started to give up his executive position from 2003.[9] Ross became deputy chairman in July 2005,[10] and by 2008 was a non-executive director. David Ross resigned from the board in December 2008 over an issue with shares.[11]

AOL UK Internet access business acquisition

Main article: AOL Broadband

The Carphone Warehouse announced that it would purchase the Internet access business from AOL in the United Kingdom on 10 October 2006 for £370m,[12][13] making it the third largest broadband provider, with over 2 million customers, and the largest LLU Operator with more than 150,000 LLU customers.[14][15] The purchase was completed on 9 December 2006.

The acquired business was operated under the name AOL Broadband.

Best Buy Europe

In May 2008 Best Buy agreed to buy a 50% share of The Carphone Warehouse retail business for £1.1 billion to launch the Best Buy Europe joint venture.[16] Best Buy branded superstores opened in the UK on 30 April 2010 with a store in Thurrock, Essex. In total, 11 stores were opened. The company closed all of its United Kingdom stores on 14 January 2012, due to poor financial results. In April 2013, Carphone Warehouse agreed to buy out Best Buy for £500 million.

The division was renamed CPW Europe, and included all stores operating under the Carphone Warehouse and Phone House brands.[17]

Demergers

On 8 May 2009, Carphone Warehouse became Britain’s second largest broadband provider after BT after it agreed to pay £236m in cash for the United Kingdom assets of Tiscali, the Italian telecoms group. At the time, Charles Dunstone confirmed that Tiscali UK would become part of TalkTalk, which would be demerged as a separate company.[18]

The group split in March 2010, with TalkTalk and New Carphone Warehouse each becoming publicly listed companies. Charles Dunstone became Chairman of both companies. Dido Harding became CEO of TalkTalk and Roger Taylor CEO of New Carphone Warehouse.[19] On 30 April 2013, Carphone Warehouse agreed to a divorce from Best Buy and to purchase the US company's 50% stake in Best Buy Europe for £500 million.[20] Separation from Virgin Mobile France, announced on 27 June 2014, is pending approval of the French Competition Authority (Autorité de la concurrence). Should that deal be approved, Carphone Warehouse, Virgin Group and Finacom SAS would end their three-way relationship by selling the French operation to the French cable and telecoms company Numericable Group SA.[21]

Merger with Dixons Retail

In May 2014, Carphone Warehouse Group and Dixons Retail announced their merger to create Dixons Carphone. The merger completed on 7 August 2014.

Divisions

Geek Squad

In October 2006, it was announced that Geek Squad would be launching in the United Kingdom in a 50/50 joint venture between Carphone Warehouse and Best Buy.[22]

Geek Squad currently offers 24-hour nationwide over-the-phone technology support.

In April 2008, the Carphone Warehouse decided to increase its joint venture with Best Buy by launching Best Buy Mobile as a "store inside a store" inside of Best Buy's or as a separate store located by Best Buy stores throughout the United States. The labour will be split between the two companies. In the same business venture Carphone Warehouse was split into four parts (half retail and half broadband) and one quarter sold to Best Buy for a sum nearing 1.1 billion.[23]

Mobile phone e-tailers

Mobile phone e-tailers e2save (OneStopPhoneShop and The Phone Spot) and Mobiles.co.uk are separately managed divisions within Carphone Warehouse. Orders are fulfilled through the Carphone Warehouse, but each company has its own terms and conditions and, significantly, rules regarding promotions.

Marketing and sponsorship

The X Factor

On 19 June 2007, the Carphone Warehouse became the official sponsor of the fourth series of The X Factor.[24] The sponsorship deal was to last for three years. The Carphone Warehouse also became the sponsor of its spin-off show, The Xtra Factor. After the Carphone Warehouse and TalkTalk split, TalkTalk took over the sole sponsorship of The X Factor.[25]

Big Brother

The company were the sponsors for the United Kingdom's version of Big Brother from 2004 to 2007. In 2006, they also sponsored Celebrity Big Brother and related Celebrity Big Brother shows on Channel 4. On 17 January 2007, in response to alleged racism in Celebrity Big Brother, Charles Dunstone said: "We are talking to Channel 4. The sponsorship is constantly under review. Clearly we are against racism. Most people understand that the person who has their name associated with the programme does not necessarily condone the content."[26][27] On 18 January 2007, Carphone Warehouse announced that it had suspended its sponsorship of the show as Channel 4 had not taken sufficient action in response to the alleged racism in the show.[28] On 8 March 2007, the company permanently dropped its sponsorship of the show.[29]

Appys Awards

In April 2011, Carphone Warehouse sponsored the Appy Awards, calling them "the United Kingdom’s first major app awards ceremony designed to recognise innovation and development in app technology".[30]

Charity support

In 2001, Carphone Warehouse established a corporate partnership with Get Connected UK that continues today. Carphone Warehouse supplies Get Connected with office and helpline equipment and it has been instrumental in ensuring it is free to call from all landlines and mobiles.[31] This partnership won the Charity Times Corporate Partnership Award in 2003 and the Third Sector Excellence Award for Corporate Partnership in 2006.[32]

Controversies

Data protection

During 2005, TalkTalk's proactive sales techniques drew criticism in the press when it was accused of practising "slamming" to win new customers.[33] Customers who bought mobile phones from Carphone Warehouse retail outlets alleged that their landline accounts were subsequently switched without their consent.[34]

On 15 August 2006, the Information Commissioner's Office issued Preliminary Enforcement Notices for breaches of PECR (The Privacy and Electronic Communications Regulations) against Carphone Warehouse and TalkTalk for making marketing calls to people who are signed up to the Telephone Preference Service (TPS) or people who have asked that the company make no further calls to them.[35][36]

On 28 October 2006, in a Times interview, Richard Thomas, Britain's Information Commissioner, stated:[37]

We're taking action against some of the telecom companies, Talk Talk and Carphone Warehouse. We're taking action against them because we've had a lot of complaints that they've been telephoning people with marketing calls, people whose name is on the telephone preference service. And then we do these prosecutions, particularly with private detectives. We've got a big case coming up.

On 8 August 2015, because of deficient designed information systems, hackers gained access to customer data for 2.4 million people who had used sites operated by Carphone Warehouse, including OneStopPhoneShop.com, e2save.com, Mobiles.co.uk and TalkTalk Group.[38]

See also

References

  1. 1 2 3 Annual Report 2013
  2. ↑ "Annual Report 2014" (PDF). Carphone Warehouse Group. Retrieved 7 August 2014.
  3. ↑ "David Ross appointed to board of the National Portrait Gallery". 10 Downing Street. 17 February 2006. Archived from the original on 6 October 2007. Retrieved 2 November 2006.
  4. ↑ Wray, Richard (8 December 2008). "Profile: David Ross". The Guardian (London). Retrieved 8 December 2008.
  5. ↑ "Carphone Warehouse Snaps Up Tandy's Old UK Stores 01/26/99". Newsbytes PM. 26 January 1999. Retrieved 5 November 2006.
  6. ↑ Wray, Richard (13 July 2001). "Founder exits 'back seat' at Carphone Warehouse". The Guardian (London). Retrieved 14 December 2008.
  7. 1 2 Cope, Nigel (13 July 2001). "Carphone Warehouse founder quits while he's (£140m) ahead". The Independent (London). Retrieved 14 December 2008.
  8. ↑ Ramnarayan, Abhinav (8 December 2008). "Profile: David Ross". The Guardian (London). Retrieved 8 December 2008.
  9. 1 2 Sabbagh, Dan (9 December 2008). "David Ross: glitz and glamour of the upper-class 'barrow boy' with all the right connections". The Times (London). Retrieved 9 December 2008.
  10. ↑ Wilson, Amy (8 December 2008). "Carphone Warehouse co-founder David Ross quits after disclosure failure". The Daily Telegraph (London). Retrieved 8 December 2008.
  11. ↑ Boyle, Catherine (8 December 2008). "Carphone Warehouse chief resigns over share disclosure". The Times (London). Retrieved 9 December 2008.
  12. ↑ "Carphone Warehouse to acquire Time Warner's AOL Internet access business in the UK for £370 million". AOL UK Press Release. 11 October 2006. Retrieved 27 October 2006.
  13. ↑ "Carphone Warehouse buying AOL UK". BBC News. 11 October 2006. Retrieved 11 October 2006.
  14. ↑ "State of the nation – Local Loop Unbundling". thinkbroadband.com. 26 October 2006. Retrieved 28 October 2006.
  15. ↑ The exact figure for LLU customers is not in the public domain, hence 150,000 is the estimated minimum. "Carphone Warehouse with 421,000 live broadband users". thinkbroadband.com. 26 October 2006. Retrieved 31 October 2006.
  16. ↑ "Carphone in £1.1bn US partnership". BBC News. 8 May 2008. Retrieved 29 March 2010.
  17. ↑ "CPW Europe". Carphone Warehouse Group. 2012. Retrieved 23 November 2012.
  18. ↑ Call-up for Talk Talk The Sunday Times. 10 January 2010
  19. ↑ Carphone puts demerger details on the table Sean Buckley. Fierce Telecom. 1 February 2010
  20. ↑ "Best Buy to Sell its Stake in European Business to Carphone Warehouse" (Press release). Best Buy. 30 April 2012. Retrieved 7 August 2014.
  21. ↑ "Virgin Mobile France" (Press release). Carphone Warehouse Group PLC. 27 June 2014. Retrieved 7 August 2014.
  22. ↑ Durman, P. "Geek Squad comes to Britain", The Sunday Times online. Retrieved on 4 April 2007.
  23. ↑ UK’s Carphone Warehouse to Open 1000 Stores in US with Best Buy | PhoneNews.com
  24. ↑ "X Factor-y on the high street". The Sun. 11 July 2007. Retrieved 1 August 2007.
  25. ↑ Sweney, Mark (19 June 2007). "Carphone Warehouse gets the X Factor". London: MediaGuardian. Retrieved 25 May 2010.
  26. ↑ "UK police investigate threats against Big Brother celebs". Ireland on-line. 17 January 2007. Retrieved 17 January 2007.
  27. ↑ Brook, Stephen (17 January 2007). "Big Brother complaints explode". The Guardian Unlimited (London). Retrieved 17 January 2007.
  28. ↑ "Big Brother sponsor suspends deal". BBC News. 18 January 2007. Retrieved 18 January 2007.
  29. ↑ "Sponsor evicts C4's Big Brother". BBC News. 8 March 2007. Retrieved 8 March 2007.
  30. ↑ "FAQs". appys.com. Retrieved 12 April 2011.
  31. ↑ "Corporate Supporters". getconnected.org.uk. Retrieved 12 May 2011.
  32. ↑ "Get Connected appoints Fiona Clark and Helen Wood to senior charity roles". sportbusiness.com. Retrieved 12 May 2011.
  33. ↑ "Phone scam hits thousands". Daily Mail. 25 April 2005. Retrieved 19 March 2007.
  34. ↑ Brignall, Miles (23 April 2005). "When slamming the phone prompts a row". The Guardian (London). Retrieved 19 March 2007.
  35. ↑ "Preliminary Enforcement Notices" (PDF). ICO. Archived from the original (pdf) on 12 November 2006. Retrieved 13 November 2006.
  36. ↑ "Statutory Instrument 2003 No. 2426 The Privacy and Electronic Communications (EC Directive) Regulations 2003". Office of Public Sector Information. Retrieved 13 November 2006.
  37. ↑ Miles, Alice; Rumbelow, Helen (28 October 2006). "Full text of the interview with Richard Thomas". The Times (London). Retrieved 13 November 2006.
  38. ↑ "Carphone Warehouse hackers gain access to millions of customer bank details". The Telegraph. 8 August 2015. Retrieved 12 September 2015.

External links

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