It’s interesting to see Phones 4u eyeing up the US market just as Carphone Warehouse pulls out. Phones 4u says that it has been talking to retailers across the pond, in particular electronics retailers, for some time.
The high street retailer is hardly diving into the unknown either following its partnership with DSGi in the UK, where it has opened some 85 concessions in Currys PC World stores, with more to come. It appears to have made a decent fist of this, so it has established a track record.
Nonetheless, if Phones 4u does enter the US market it is a brave move given the tough economic conditions stateside. Consumer electronics is not a thriving retailing environment just now in the UK and it’s not likely to be much better in the US.
Hard-pressed consumers are hanging onto their cash. That said, mobile phones are now seen as an essential purchase rather than a luxury one like most consumer electronics. But if footfall is down in electronics stores that means fewer people passing the mobile phone store in store – unless it can establish itself as a go-to destination in its own right.
The lack of large specialist mobile phone retail chains in the US is an obvious attraction and its chief rival Carphone Warehouse – in combination with Best Buy – certainly found a ready audience. Providing Phones 4u hooks up with the right partner (or partners) there is no reason why it should not succeed.
The exact reasons for Carphone’s decision to pull out are unclear given that the joint venture was doing well and looked set to provide a decent revenue stream for the future. Perhaps the lure of the $1bn it got from Best Buy was just too attractive given the current economic climate in the UK. Or maybe the need to disentangle the Best Buy/Carphone 50:50 corporate structure partly dictated the move.
Carphone has shown the US market can be cracked by an outsider in partnership with a major US retailer. Given the right partner and the right business model there is no reason why Phones 4u cannot carve out a niche for itself in the giant US market.
• News: Phones 4u targets US mobile phone market