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3 years ago
UPDATE 2-UK's Dixons Carphone says "Black Friday" here to stay
December 17, 2014 / 11:01 AM / 3 years ago

UPDATE 2-UK's Dixons Carphone says "Black Friday" here to stay

* Black Friday now rivalling Boxing Day as biggest day

* First half turnover of 5 billion pounds, up 1 pct

* Comfortable with market expectations for 2014-15 year (Recasts, adds detail, executive comment, shares)

By James Davey

LONDON, Dec 17 (Reuters) - "Black Friday" is becoming a welcome fixture in the British retail calendar, consumer electricals chain Dixons Carphone said on Wednesday, adding it was close to being its busiest day.

Most British retailers fully embraced Black Friday promotions this year, both in store and online, seeking to follow their counterparts across the Atlantic and kickstart trading early in the key Christmas period.

Analysts are concerned that the discounts pull forward Christmas sales that store groups would otherwise have made at full price and can dampen business in subsequent weeks.

However, Dixons Carphone protects margins by placing especially large orders with suppliers. In some instances it gets suppliers to devote their factories to one model, bringing down the cost, a saving which is passed on to consumers.

"We end up making incredibly large promotional offerings for customers in combination with suppliers and that ensures that we can get the right margin," Finance Director Humphrey Singer told reporters after the company reported a 30 percent rise in first half profit, sending its shares up 4 percent.

Singer said the Nov. 28 event was "huge", exceeding company expectations, as shoppers snapped up Samsung TVs, De Longhi coffee machines and Bose speakers. He said Black Friday was now rivalling Boxing Day, Dec. 26, as its biggest day of the year.

"This I think is the new pattern of Christmas trading and we're all going to have to get used to it."

A Black Friday shopping spree pushed British retail sales growth to a three-month high in November, according to an industry survey published last week.

GERMAN, DUTCH PROBLEMS

In August Dixons Retail, Europe's second largest consumer electronics retailer, and Carphone Warehouse, Europe's largest independent mobile phone firm, merged to create Dixons Carphone, which found a place in Britain's blue chip FTSE 100 index.

The merged firm made a pro forma pretax profit of 78 million pounds ($123 million) in the 31 weeks to Nov. 1. Revenues rose 1 percent to 5.02 billion pounds.

The company said it was comfortable with market expectations for the 2014-15 year.

Market share was won in the UK and Ireland, Nordics and Greece. However, the Netherlands and Germany remained "challenging". The firm's businesses there are being reviewed, with some stores already closed and head office costs reduced.

The company booked exceptional charges of 100 million pounds, partly relating to the restructuring in Germany and the Netherlands. ($1 = 0.6361 pounds) (Editing by Keith Weir)

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