Carphone Warehouse to Split Next YearDavid Meyer
Carphone Warehouse (CPW.L) is to split into two separate companies, decoupling the retail and broadband operations.
In its preliminary annual results, Carphone Warehouse said the demerger would be completed by July 2010 at the latest. Carphone Warehouse sold half of its phone retail side to the US-based electronics chain Best Buy (BBY) a year ago, and chief executive Charles Dunstone said in Friday's results statement that the time had come to separate the resulting joint venture from Carphone's TalkTalk broadband network.
"It's been increasingly obvious that the group is now two businesses—Best Buy Europe and TalkTalk Group," Dunstone said. "The one grew out of the other, but both have now reached the stage where there are no material synergies between them and where, for operational and competitive reasons, they need to operate independently. The businesses are effectively run as separate entities already."
Dunstone said separate banking facilities for Best Buy Europe are close to being finalised. He said both Best Buy Europe and TalkTalk would be listed as independent, publicly quoted companies.
A spokesperson for the company told silicon.com sister site ZDNet UK on Friday that Carphone Warehouse stores in the UK will retain their name, although Best Buy electronics stores will open here next year.
TalkTalk is about to become the largest residential broadband provider in the UK, once its £236m acquisition of Tiscali (TIS.MI) UK is completed.
Overall, Carphone Warehouse's results showed a slight year-on-year drop in revenue. Dunstone pointed out, however, that the degree of change the business had seen over the past year made it difficult to compare the two years' results.