Mon, 15 Sep 2014 | ADMINISTRATION
Mobile phone seller Phones 4U has entered administration with its 550 stores set to be closed today (15 September), and placing 5,596 jobs at risk.
PwC is expected to be brought in as the administrator and will determine whether the business can continue trading or not.
The business, which is owned by private equity firm BC Partners, attributed the situation to mobile network EE’s decision not to renew its contract, not long after Vodafone did the same thing.
Phones 4U head David Kassler commented: “If mobile network operators decline to supply us, we don’t have a business.”
Employees were told to arrive for work as usual on Monday, when they would receive further information about the situation and that they can expect to be “paid until further notice”.
Existing mobile contracts taken out via Phones 4U won’t be affected, however any phones that have been freshly ordered, including the new iPhone 6 over the weekend, will be. The retailer has promised to refund any customers in full for orders that haven’t been fulfilled. Any affected customers can call a customer service line open from Monday at 09:00.
EE’s contract with Phones 4U is due to expire in September 2015, and will result in, BC Partners say, “less competition, less choice and higher prices for mobile customers in the UK”.
Established by entrepreneur John Caudwell in the mid-1980s, he went on to sell the business for £1.5 billion some two decades on. Today, while it is profitable with £1 billion revenues and underlying profits of £105 million for 2013, with withdrawn contracts from phone networks it no longer has a business, Phones 4U said. The company does also have debts of £635 million.
O2 and Three have both stopped selling through Phones 4U, with O2 quitting earlier this year and Three some time before.
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Related information:
Contact the London office of PwC here
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