BT has taken a £149m hit after ending a two-decade old relationship with electricals retailer Dixons Carphone. A disclosure in the telecoms operator’s annual report revealed the cost of the settlement after it chose to end a contract between EE, its mobile division, and Carphone Warehouse last September. BT said it had resolved all outstanding matters with the retailer, including “revenue share costs that could have previously been recognised over future years”. The £149m settlement cost consisted of a cash payment made in April and writing off balance sheet prepayments. BT said at the time it had decided to focus on selling EE services online or through its own 575 stores following months of “challenging discussions and negotiations”. The company’s decision to end the agreement came after O2 severed ties with Carphone Warehouse last year. Tensions between mobile network operators and Dixons Carphone intensified three years ago when chief executive Alex Baldock pushed to renegotiate “unsustainable” contracts. Carphone Warehouse and Currys PC World were being hit with financial penalties because they could no longer reach stringent sales targets agreed with operators when they were selling more mobile phones. The electricals retailer earns a commission for each customer it signs up to a mobile network. Carphone Warehouse has been a waning force in EE’s distribution in recent years, dropping more than 50pc to account for less than 15pc of new customers and upgrades.
The group said Currys PC World, Carphone Warehouse, Team Knowhow and Dixons Carphone will all become Currys by October.
Shops bearing the Dixons, PC World and Carphone Warehouse names are set to disappear from the high street this year as Dixons Carphone rebrands the entire business as Currys. The electricals retailer said the Currys PC World, Carphone Warehouse, Team Knowhow and Dixons Carphone stores in the UK and Ireland will be renamed by October. It will mark the end of PC World's three decades on the high street after it was founded in 1991 by entrepreneur Jan Murray who sold it three years later to Dixons. The rebrand comes after a major upheaval of the company's store estate amid a shift to online shopping. Last year it shut all of its 531 Carphone Warehouse stores, affecting 2,900 jobs, as people hold on to handsets for longer and buy directly from manufacturers. The business decided to shut all of its airport shops last month after a scheme allowing VAT-free shopping for overseas tourists was scrapped and the pandemic continues to restrict international travel. Currys said the rebrand is part of a £190m investment which will include a new website and a repair service. It will also launch its own mobile phone bundle later this year.