Mobile phone retailer enters administration
Mobile phone retailer Phones 4u has entered administration; it was confirmed yesterday (Monday), putting 5,596 jobs at risk across the UK.
Administrators PwC were called in, after suppliers EE announced on Friday afternoon that it would not be renewing its current contract, due to end 30 September 2015.
A similar decision by mobile operator Vodafone early this month “means that Phones 4u is suddenly in a position where it will be without a mobile network partner when the current contracts expires,” a statement from the firm said.
All 550 standalone stores were closed yesterday, and the retailer’s website was offline while administrators discussed the future of the business.
The employer said it intended to pay its staff until further notice, and PwC confirmed its main priority was to secure finance to pay all outstanding wage arrears.
"Our initial focus will be to quickly engage with parties who may be interested in acquiring all or part of the business, and to better understand the financial position and options for the company,” said Rob Hunt, joint administrator and partner at PwC.
"We will also be talking to network operators and suppliers, and trying to access funds to pay for the costs of the business, including wages,” he added.
As news hit, John Caudwell, who founded Phones 4u in 1996 and sold the business in 2006 for £1.5bn, tweeted: “I am sickened and saddened for nearly 6,000 wonderful employees who made @Phones4u into a great business”, he said blaming the mobile phone operators who had cut ties with the company.
O2, which only accounted for around 10 per cent of Phones 4u sales, pulled out in February.
Current chief executive, David Kassler, said it was a sad day for both customers and staff, and even though the company won ‘Best Mobile Retailer’ in 2012 and 2013, the business relied heavily on having suppliers.
“If the mobile operators decline to supply us, we do not have a business,” he said.
“The great service we have provided should have guaranteed a strong future, but unfortunately our network partners have decided otherwise. The ultimate result will be less competition, less choice and higher prices for mobile customers in UK,” he added.
Neighbouring high street retailer, Dixons Carphone, said it would offer 1,500 jobs to Phones 4u staff already employed in the 150 plus concessions in Dixons PC World/Currys megastores.
In a statement the company said: “We would like to offer support with regards to our Phones 4u shop-in-shop colleagues, we hope to help them secure new jobs with us and will be opening up discussions with the administrators to agree what we can do. Any Phones4u colleagues interested in applying for one of the existing 1,500 vacancies we have in our Carphone Warehouse stores are also welcome to get in touch with us.”
Phones 4u stores will remain closed pending a decision by the administrators on whether the business can be reopened for trading.