Dixons Carphone shares excited by plans to open up to 500 stores in the US through a joint venture with Sprint

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Shares in Dixons Carphone soared by over 4 per cent this morning after the recently created group announced plans to team up with one of America’s biggest telecoms firms to open up to 500 stores.

The company, formed last year by the merger between electricals retailers Dixons and Carphone Warehouse, said its Connected World Services arm has agreed a deal with Sprint to initially open and manage 20 stores selling phones and tablets across the US in cities like Chicago and Miami.

The initial plan is only a trial, but if it goes well the aim is to continue with a 500 store roll-out, with CWS investing $32million (£20.5million) to buy a 50 per cent stake in the venture.

The company's stocks was the biggest riser on the FTSE 100 index in midmorning trade, with shares up 3.5 per cent, or 15.9p, at 474.7p.

Tie-up: Dixons Carphone will open and manage 20 Sprint-branded stores in US cities like Miami and Chicago

Sprint, America’s third largest mobile phone group, has nearly 60 million customers and already runs around 3,000 wholly-owned and dealer operated stores across America.

The new stores will operate under the Sprint brand, but Dixons Carphone will open them, manage them and provide retail expertise and advice to help Sprint expand further and increase its market share across the US.

Nick Bubb, an independent retail analyst, said: ‘Although Dixons’ experience in the US is not a happy one, Carphone Warehouse did well there with Best Buy and the City seems excited today about the news of a new US venture for the group’.

Carphone Warehouse had a profitable joint venture in the US with consumer electronics giant Best Buy, which the US firm eventually acquired for $1.3billion in 2012 (£833million). 

Carphone’s UK and European joint venture with Best Buy was not as good though, with the US group selling its stake back to Carphone.

Dixons’ experience in the US was unsuccessful as it bought Silo, the US third largest power retailer with 147 stores, in 1987 but sold it off in 1993. Dixons is the owner of Currys and PC World.

Andrew Harrison, Dixons Carphone deputy group chief executive and head of the Connected World Services division, said: ‘This is a very exciting venture for us, and is a significant step in growing our CWS business in the US.

‘We bring specialist knowledge and skills to this partnership and will be looking to deliver innovation and outstanding customer service under the Sprint brand.’

Marcelo Claure, chief executive of Sprint, said the group wants to tap into Carphone's ‘know-how as one of the world's leading wireless retailers to benefit Sprint and its customers’.

‘We are committed to offering the best customer experience when buying wireless products and services,’ he added.

Mike van Dulken, Head of Research at Accendo Markets, said: ‘Further evidence of DC’s expertise and reputation comes from the partnership seeing it commit to providing specialist support and retail know-how to the Sprint group as a whole.

‘It may almost be Independence Day, but Sprint has decided not to expand at home alone.’

Dixons Carphone recently hailed a 'stonking' rise in sales at Currys and PC World thanks to customers splashing out on televisions costing up to £2,500. 

Strong demand for the latest wafer-thin screens, as well as a bigger variety of delivery options and longer warranties, drew in more customers, it said.

This fuelled a 13 per cent rise in underlying fourth-quarter sales in the UK – well ahead of the 5 per cent rise that analysts had expected. Group underlying fourth-quarter sales, including overseas, increased 9 per cent. 

Dixons Carphone said full-year profit would be above its £355million and £375million guidance, following strong Easter trading.