This article is more than 2 years old

This article is more than 2 years old

Nearly 100 Carphone Warehouse stores are to close this year as the retailer’s new boss, Alex Baldock, issued a profits warning and pledged to take action to adapt to a changing mobile phone market.

Dixons Carphone said it will shut 92 Carphone Warehouse standalone stores this year as it grapples with a shift in consumer habits and rising costs.

Analysts suggested more closures could be on the way as Dixons trims back its estate of more than 700 standalone Carphone stores. “There should be some easy wins in terms of making it leaner,” said Neil Wilson, the chief market analyst at Markets.com.

Six reasons why Britain’s retailers can’t make ends meet Read more

Shares in the group, which have already lost 30% of their value in the past year, closed down a further 20% at 185p as it warned profits would fall to £300m, well below City forecasts of £387m for the year to April 2019.

In an unscheduled update, the company blamed a shrinking market for electrical goods as well as cost increases from the rise in the legal minimum wage and an increase in the cost of sourcing goods overseas for a squeeze on profit margins.

The warning came as Dixons confirmed profits would crash to £382m in the year to April 2018, 24% down on the £501m made a year before.

Analysts had been expecting that fall after the company issued a profits warning last summer, blaming the fall in the value of the pound in the wake of Brexit, which has made mobile handsets more expensive while technical innovation has slowed, giving shoppers less reason to update.

Hard-pressed consumers are holding on to their phones for longer and going “sim-only”, hitting Dixon’s performance. The group said it was closing stores as it had to become more efficient but said no jobs would be lost as a result of the closures as staff will be offered the chance to move to larger outlets nearby.

Baldock, who replaced the longstanding chief executive Seb James earlier this year, said: “Though there’s plenty to fix, it’s all fixable.”

He said the business had been too inward looking, short-termist and “easily distracted by dabbling in peripheral opportunity” and was now aiming to improve its main UK businesses, partly by ensuring Carphone Warehouse and the Currys PC World chains worked more closely together.

Baldock said the group would also be investing £30m in improving customer service by retraining staff in stores and at its call centres, and would continue its attempt to renegotiate contracts with the mobile networks to reflect the slowdown in phone sales.

He said there were no current plans to close Currys PC World stores and a high street presence remained important to the group. “We see stores at the heart of what makes this business distinctive,” he said.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

He said: “We won’t tolerate our current performance in mobile, or as a group. We know we can do a lot better.”

The store closures will add to the pain on the high street after a long list of retailers and restaurant chains have signalled a retreat. Carpetright, New Look, Mothercare, Byron, Jamie’s Italian and others are closing outlets in the face of falling consumer confidence and a shift to buying online.

This week alone, House of Fraser, Mothercare and Carluccio’s are expected to reveal further details of closures as part of formal restructuring processes, known as company voluntary arrangements (CVAs), which require approval by creditors including landlords.

Revo, which represents retail property companies, has written to the Commons housing, communities and local government select committee warning of the consequences of the trend for CVAs.