UK's biggest tech retailer joins forces with Sprint to open 500 stores in US
A joint venture between Dixons Carphone and Sprint will expand the carrier's retail operation in the US.
The UK's biggest technology retailer is crossing the Atlantic to provide know-how for new Sprint stores.
Just in time for Independence Day, British retail group Dixons Carphone and the US carrier announced a joint venture Thursday that could see up to 500 new Sprint stores open their doors.
With 57 million subscribers, Sprint is the third-largest mobile carrier in the US, behind AT&T and Verizon. This partnership marks Dixons Carphone's first effort outside the UK after last summer's merger of Dixons Retail and Carphone Warehouse. The move also comes a day after Sprint announced its rollout of more than 1,400 mini-stores within RadioShack shops, following the latter's bankruptcy and sale earlier this year.
To start, Dixons Carphone will open and manage 20 Sprint-branded stores in Chicago and Miami. The first stores will open in early August and more will follow throughout autumn.
If the pilot is successful, Dixons Carphone could open up to 500 more sites. The US and UK companies each hold half of the joint venture, which Dixons Carphone said could lead the UK company to invest up to £20 million ($31 million).
That isn't a huge amount as these things go, but industry analyst Kester Mann of CCS Insight believes that makes the move a low-risk strategy for Dixons Carphone "Having sold out of Germany recently," Mann said, "Dixons Carphone is looking to the potentially lucrative US market, where mobile contracts are more expensive than in Europe. Given the challenges faced by the UK high street the move to the US could be a good hedge, and may be a beachhead for the company in the American market."
Dixons Carphone was formed last year in a £3.8 billion ($5.9 billion) merger of mobile phone chain Carphone Warehouse and retail group Dixons, which owned gadget stores Currys and PC World. In April this year, Carphone Warehouse started its own UK mobile network, iD. The merged group also owns retailers Elkjøp and Phone House in Europe.
With the failure of other UK-wide technology chains such as Comet and Phones 4U in recent years, Dixons stores and Carphone Warehouse were in effect the last men standing for UK brick-and-mortar tech retail. Apart from independent stores, supermarket bargain bins, smaller chains like Maplin and phone shops operated by the mobile networks themselves, the merged Dixons Carphone group now effectively owns the British retail sector when it comes to technology.
Previous attempts by tech retailers to cross the pond haven't been that successful. In 2008, the pre-merger Carphone Warehouse formed a partnership with US retailer Best Buy. Best Buy eventually bought the US stores from its UK partners, but was less successful in the UK. Best Buy opened its doors in Britain in 2010 -- and ignominiously closed them less than three years later, with the company dumping its stake in Carphone Warehouse for a £500 million ($775 million) loss.
Further back, Dixons unsuccessfully attempted to enter the US market in 1987, buying American retailer Silo for £210 million ($320 million) but selling at a £29 million ($45 million) loss six years later.