Fone Zone buys MPC

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Mobility retailer Fone Zone has bought out rival South Australian retailer MPC Communications for an undisclosed sum.

The acquisition adds seven stores to bring the Queensland company's total number of shops to 89.

Maxine Horne, COO at Fone Zone, said the Adelaide purchase was the latest in a round of acquisitions aimed at growing the company to 150 stores nationally.

The MPC Communications buyout is the third for the mobile phone retailer in as many months, following the purchase of Let's Talk and In Touch Communications groups in March, after investment bank Investec granted the company $8 million in capital in February. Fone Zone had 56 outlets at the beginning of the year.

“We didn't have a presence in Adelaide [before]. The MPC stores are all in shopping centres fitting exactly with our strategy,” Horne said. “Our objective is to be a truly national company with stores across metropolitan and regional Australia.”

Fone Zone is also negotiating to buy another company “that will further expand our distribution channel”, but the deal is not expected to go through until July, she said.

Horne said the MPC buyout would allow Fone Zone to develop a corporate sales division for South Australia. Nationally, Fone Zone's corporate sales division has grown 700 percent in 18 months, to 10 percent of the company's $52 million gross annual revenue.

Another five percent of the company's revenue was derived from its direct online and telephone sales channel, with the remaining 85 percent to consumers via Fone Zone's 89 retail stores.

“The growth of our corporate division has exceeded our retail operation's growth by 23 per cent at the same stage in its life cycle and we see ourselves as being the market leader in this sector by the end of 2004,” said David McMahon, Fone Zone's CEO.

Horne said Telstra last year had named Fone Zone its “number one dealer”, based on a variety of metrics including sales targets.

Horne said Fone Zone's customer service helped seal its success. “We have a formal program, with specific requirements...for example, we pre-charge batteries for customers...and we give coffee-and-muffin vouchers to customers who might need to have a lot of numbers changed over [to their new phone] while they wait,” she said.

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