Opinion: Are Dixons Carphone's three-in-one stores its problem?

Dixons Carphone shares took a kicking on Friday as a broker expressed severe misgivings about the company’s mobile business.

All this after the airports-to-high-streets electricals retailer posted record results back in June, which showed profits up 10% and like-for-likes increasing by 4% in the year to the end of April.

Yet it is hard not to see the Carphone element of the equation as a mild disjoint. Yes, it is certainly part of the world of microelectronics, but walk into one of the new three-in-one stores and this bit looks the least integrated.

The colour scheme is different, as is the layout. Indeed, it does look almost like something that has been beamed down at the 11th hour to be part of the whole.

Two’s company…

There is an argument that personal computers and white goods make uncomfortable bedfellows, but the Currys PC World duo has been part of the retail landscape for so long that not only is it fully accepted by shoppers, but it almost seems part of the natural order of things.

It is probably also somewhat more straightforward to partition a shop into two parts, and have them operating sympathetically, than to do so with three.

“At a time when there tends to be a move towards smaller, more specialist shops, putting everything you can think of under one roof looks curious”

This was not, as it happens, the underlying rationale behind the broker downgrade.

The reason for the harsh conclusion is that when it comes to handset upgrades and the unbundling of handsets and network contracts, the picture is not rosy for Carphone – and it appears others agreed with the sentiment.

This might be incorrect, but at a time when there tends to be a move towards smaller, more specialist shops, putting everything you can think of under one roof looks curious.

Present problem

These may be teething problems and in a couple of years we may look back and wonder what all the fuss was about.

Carphone’s identity will have been indissolubly merged with the Currys PC World fascia. But for moment, it does look like a problem.

The other thing that is worth considering is whether it might make sense to have a Carphone PC World fascia (at the risk of further slicing the cake) and leaving the Currys offer to stand on its own, or alongside the others only in large, edge-of-town locations.

Much will be said about the reasons for the markdown of the shares, particularly in the face of a fine set of results, but in uncertain times, any perception of a potential flaw will bring a swift market reaction.