Ian: Carphone cuts are good news

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The significance of Carphone Warehouse chief executive Andrew Harrison’s overhaul of Carphone Warehouse and search for new efficiencies is the most dramatic example yet of how the economic downturn is forcing every company to rethink its business model.

For 20 years Carphone has been the definitive mobile success story. Over the years other mobile retailers have hit the buffers, consolidated, dealt with setbacks, lost money, and restructured.

Carphone has relentlessly and, some would say ruthlessly, hoovered up the majority of business without an apparent care in the world.

There are not many organisations that could afford to blow £1 million on a staff shindig even during the glory years of Brown’s ‘Boom’.

Now Carphone too must take stock, count its costs, and find new efficiencies and cost savings. The trick of course is to do this without destabilising a very slick organisation.

Harrison seems to have got it right. Get rid of the dead weight of back office transactional stuff.  Focus on the things that fill the tills.  It should be an even stronger player come the upturn.

 

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