British mobile phone retailer Phones 4u is to go into administration after network operator EE joined Vodafone in cutting ties with the retailer.
The company said its stores will be closed today pending a decision by the administrators on whether the…
British mobile phone retailer Phones 4u is to go into administration after network operator EE joined Vodafone in cutting ties with the retailer.
The company said its stores will be closed today pending a decision by the administrators on whether the business can be reopened for trading.
The process of appointing PwC as an administrator is expected to take place today.
Phones 4u said the decision by EE not to renew its current contract, which is due to end in September next year, was a “complete shock” and meant it would be left without a single network partner after Vodafone said earlier this month that it would not extend its agreement.
The company, which is owned by private equity firm BC Partners, has 550 standalone stores, employing 5,596 people whose jobs are now at risk.
Phones 4u chief executive David Kassler said last night: “Today is a very sad day for our customers and our staff.
“If the mobile network operators decline to supply us, we do not have a business. A good company making profits of over £100m, employing thousands of decent people has been forced into administration.”
Employees have been asked to report to work as normal this morning as they will be briefed by management.
The business was set up by entrepreneur John Caudwell in the mid-1980s. By the time he sold it for £1.5bn in 2006, it was selling 26 phones a minute and employed 10,000 people. It generated sales of more than £2.25bn.
Phones 4u said it remained a profitable business, with turnover of over £1bn, underlying earnings of £105m in 2013 and significant cash in the bank.
The Vodafone tie-up with Phones 4u represented some £212m of sales and about £18.5m of earnings in the year to July 31.
Phones 4u said all mobile contracts bought through Phones 4u will remain unaffected and the networks will continue to provide mobile services to these customers.
