Tuesday, 4 October 2011

The Carphone Warehouse

Carphone Warehouse Group PLC (LSE: CPW), known as The Carphone Warehouse, is Europe's largest independent mobile phone retailer, with over 1,700 stores across Europe. It is based in the United Kingdom and is a 50% subsidiary of Best Buy. Outside the UK and Ireland, the retailer is named The Phone House.


The company was co-founded in 1989, when most portable phones were too bulky to carry and called car phones, by current CEO Charles Dunstone. Dunstone put £6,000 into the company from his savings, and then called his old school friend and Chartered Accountant David Ross, 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. Now also trading as The Phone House, Carphone Warehouse is Europe's largest independent mobile phone retailer.

While Dunstone became the public face of the Carphone Warehouse, Ross (described by Dunstone as his "secret weapon"), developed and drove the high street retail footprint of the company by buying Tandy in the UK. 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 - to become the third partner, later taking up the role of Logistics and Distribution director.

Ross led the footprint development of the company, under The Phone House brand, across Europe and the United States. When Ross led the IPO of Carphone Warehouse in 2000, it had been so successful that the partners had not needed to borrow or involve outsiders: Dunstone owned half, Ross a third, and Johnson most of the rest.

Only Johnson of the three partners had a family, and having according to media reports becoming less enamoured by the Ross-led European expansion of the organisation, sold the majority of his stake in 2001 and retired with his young family to his holiday home in Portugal.

While Ross had been joint-Chief Operating Officer with 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. Ross became deputy chairman in July 2005, and by 2008 was a non-executive director. Ross resigned from the board in December 2008 over an issue with shares.

The group split in March 2010, with TalkTalk and New Carphone Warehouse becoming publicly listed companies. Charles Dunstone became Chairman of both companies. New Carphone Warehouse holds a 50% stake in Best Buy Europe and a 47.5% share in Virgin Mobile France. Dido Harding became CEO of TalkTalk and Roger Taylor CEO of New Carphone Warehouse.1


Year       Month Event
1989                       The Carphone Warehouse launched
1994                       Carphone Warehouse Insurance launched
1996                       First Phone House stores open outside of the UK, in Paris and Dublin
1999       January                Acquisition of Tandy (UK only) for £9m2
2000       July        IPO on main market of London Stock Exchange at a price of GBP£2.00 per share
2001       June      Acquisition of Cellcom for £9.1m3
2002                       Acquired Opal Telecom
2003                       TalkTalk brand launched
2004       January                Acquisition of e2save for £4.7m4
March   Acquisition of Xtra in Spain for £11.6m4
November          TalkTalk Broadband launched
2005       March   Acquisition of OneStopPhoneShop for £15m5
December           Acquisition of Tele2 for £11.5m5
                Acquisition of One.Tel for £169.6m5
2006       April       "Free" TalkTalk broadband offer launched6
October               Acquisition of the access business of AOL UK for £370m7
                Vodafone switches its contract business to Phones4U8
November          Launch of a MVNO in Spain under the brand "Happy Móvil"
2007       January                Suspension of the Big Brother sponsorship deal.
May       Roll out of Geek Squad nationwide.
June      Three-year £7million X Factor sponsorship deal signed.9
July        Carphone Warehouse offers free laptop with AOL Broadband (counter-offer of PC World's free laptop with Orange Broadband deal).
September         The Carphone Warehouse joins the FTSE100
2008       May       Carphone announces £1.1bn takeover by Best Buy
2010       March   Carphone and TalkTalk split to create two separate publicly listed companies