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Fonehouse aims to be third biggest

Paul Withers
February 14, 2011

Retailer sets sights on number three retailer position following documentary success Fonehouse has set a target of becoming the third-largest high-street mobile retailer by the end of next year, with the company seeking to capitalise on its raised profile after featuring in a Channel 4 documentary.

The retailer is expecting the opening of about 120 additional stores to take its total shop portfolio to 170 outlets.

Fonehouse has 50 stores and this year wants to add three partners to its franchise programme every month to take its total to at least 80 before the end of the year. It will look to significantly increase this growth-rate by opening a further 90 stores next year.

The retailer is also confident of growing sales by 80 per cent before the start of 2012, raising turnover to about £45 million in the next 12 months.

The ambitious targets are a result of Fonehouse featuring in Channel 4’s Mary Portas: Secret Shopper, which aired on February 2. Portas examined the poor level of customer service in the mobile industry and how Fonehouse has developed its business to combat that.

Featured heavily was a store re-fit programme the retailer is implementing. Live demo handset bays are being installed to provide a more interactive customer experience, while the standard white walls, grey slatwalls and front desks are being replaced with light-coloured wooden benches and exposed brick walls to create a ‘sit down and relax mentality’.

A tribe system for handsets has been developed, which categorises mobiles by who they are designed for. It features wording like ‘Fones to Talk and Text’ and ‘Fones Which Can Do Everything’. These tribes are represented throughout the store with dedicated bays and information on individual handset cards.

Posters are being replaced by 42-inch LED screens in store windows, which display animated content of Fonehouse promotions. Live interactive handsets are along side-walls and tables in the centre of stores. On the central bays are 20-inch touchscreen television displays with information on the products in store as well as enabling the user to compare handsets and tariffs.

The first store to have the refit and featured on the programme was in Angel, North London. Since it aired, sales have doubled there as well as growing by 30 per cent across its entire business.

Each of Fonehouse’s franchise partners will be required to invest on average £25,000 of their own money for their store to be revamped, although the amount depends on the size of the shop.
Fonehouse starts work on its Holloway Road store in North London this week, followed by Walworth Road, near Kennington in south-east London and the store in Bluewater Shopping Centre in Kent.

It will take six weeks to refit Fonehouse’s 50 stores. Existing partners can change to the new-store look in their own time but dealers joining the programme have to adopt the new style immediately. Fonehouse will also look to add to the five stores it wholly owns to its portfolio.

Fonehouse managing director Clive Bayley labelled the response from existing and potential partners as “absolutely phenomenal”. He claims the retailer is taking over 100 enquiries from interested partners every day, instilling belief that all the targets can be met.

“We have had around 50 application forms back already from interested dealers, and these are from people very serious about working with us.

“Retail partners will have to invest £25,000 each. The Angel store cost £45,000 to refit but once we’ve refitted a couple we’ll know where to cut corners and that will reduce massively. Some partners may even get the look for £15,000.

“We can now establish ourselves as a very important national retail brand. What we have to do is to get the partners signed up and to open the shops. We have the formula for a great national brand and my aim is to become the third-biggest national mobile retailer by the end of next year.”

The current top-three high-street retailers are Carphone Warehouse, Phones 4U and Go Mobile.

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