Deathwatch: Phones 4U plunge into administration

14 September 2014

Bitterwallet - Phones4U logo Phones 4U have gone straight into administration and did not pass Go, or collect £200. The whole thing kicked off after their last remaining mobile partner, EE, ditched the retailer.

EE brought around half of Phones 4U’s sales in and Vodafone had already said that they weren't renewing their contract and  O2 walked away from the retailer in February.

The business has 720 stores and employs over 5,000 people, who will be briefed tomorrow morning by management. BC Parters, Phones 4U's private equity owner, said it is "intended that employees will continue to be paid until further notice".

PwC will be appointed as adminstrators.

All the Phones 4U stores will be closed while it is decided whether the administrators can open the doors or not. If you have a mobile contract through Phones 4U, you'll be thrilled to learn that, at the moment, it doesn't change anything.

David Kassler, chief executive of Phones 4U, said: "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 £100 million, employing thousands of decent people has been forced into administration."

"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."

There could be something fishy afoot too. Phones 4U, it has been rumoured, were considering a complaint to industry watchdogs, alleging that the mobile operators were in cahoots to reduce competition and start hiking the prices up for everyone.

TOPICS:   Mobile   High Street News

22 comments

  • James b.
    I work for carphone, and all I can say is time to watch those shares rise
  • Her L.
    Well called BW!
  • chris
    I got my contract through phones 4 u (Vodafone network) but any queries I had I always phoned phones 4 u. I will no longer want to keep this contract on the phone if I am dealing directly with Vodafone(I also think it's appalling how they have just done this) I am around 5/6 months into this contract. Can I walk away from it and go elsewhere? After all I took the contract out with phones 4 u?! Hope someone can shed a little light on this. Thanks
  • weenie
    Wonder what this means for the Phones4U Arena in Manchester, if anything?
  • Destiny
    I can see why Mobile phone operators are pulling out of the middle man business, they know they can sell the phones just as well and not have to pay a hefty commission fee to each respective company. I'm sorry to see jobs go but this is kinda understandable.
  • Tim
    Chris - your contract was always with Vodaphone and not Phones4U so your still bound by it's conditions.
  • Alexis
    More telling is the story that P4U were about to complain about price fixing in the industry. Funny how iPhone 6 prices are higher for each network than they were for the last release.
  • Viethy
    I've got a contract through Lifemobile which is the Phones 4u own network and which piggybacks onto EE, any ideas what will happen to this? Would quite like out of the contract as its a pain but would like to keep my number?
  • Colin
    My contract is also with life mobile, like Veithy I would also like to know what happens now to ensure my phone continues to work and of course what happens to my payments as they fall due.
  • Not C.
    Having been flogged a five year Cellnet deal by JOhn (fx: spit) Caudwell in the late 1980s, I know what Phones4U are really like. Basically they told Voda that they would stop selling their airtime, so Voda did what you'd expect them to do. That ludicrous bargaining stance continued with EE, with the result we see today. Phones4U's senior mgt are ENTIRELY to blame for this situation. Do you REALLY think ALL the mobile networks would can a major outlet like Phones4U? This company's approach to business sucks... :(
  • So r.
    It's £200 when you pass go...
  • me
    Phones4u are a barbaric business only out to feed themselves . I for one am glad this has happened but am truely sorry to everyone that looses there jobs . I have been redundant twice. I have also worked for this p##s taking hard hitting company the only people who will benefit is the greedy directors. Remember the link and what p4u did to them funny how thing do a complete 360 . Oh and they treat there staff like sh1te
  • shinkyshonky
    You have to read past the whole story and also look at the debt of the company... Quoted from the FT So the owners of Phones 4U must be in trouble? Not at all – in fact they made a tidy profit. BC Partners, the private equity group that acquired the chain in 2011, carried out what is known as a “dividend recapitalisation” last year that gave a 30 per cent return on investment. The practice, where debt was raised on Phones 4U’s balance sheet to pay out a special dividend, has been criticised for leaving businesses saddled with high debts and vulnerable to external market shocks, although it has become commonplace in the private equity world. Phones4u may have been nudged over the cliff by EE/Vodafone etc...but they were hurtling towards it anyway
  • Confused
    I don't understand... The company was making money and there contracts with EE and Vodaphone didn't run out till next year... So why are they in administration. Surely they could have continued to trade for some time and then if another solution could not be found close... This seems rather fishy to pull the plug so soon, particularly as the chain is owned by an investment company's, seems more like someone took all the money and ran at the first sign of trouble.
  • shiftynifity
    Pure greed made them go tits up… from the ft But others are looking at private equity industry business practices. The collapse came a year after BC Partners, Phones 4U’s owner, took out a £200m dividend by adding more debt to the company. The bonds lost almost all their value as the company sought protection from creditors. “Questions must be asked of the owners’s decision to take £200m out of the business shortly before it went into administration making 6,000 people redundant. It seems that as with Southern Cross we see private equity happy to take the profits, but laying out the risks on to others,“ said Helen Goodman, shadow telecoms minister.
  • pete
    I got a Siemens phone from them in 2001 and it still works.
  • Pasta P.
    I got semen on my phone and it no longer works.
  • Chippy W.
    It's £200 when you reach 'Go', or indeed if you do pass it.
  • shinkyshonky
    I got a Siemens phone from them in 2001 and it still works....but not phones4u...
  • Rusty
    I have been a manager of a p4u store and all they are interested in is profit. Customer service,well you are having a laugh. I was made redundant so joined them,but i have never been employed by a company who just see profit. I left them fairly quickly as i could see what they were all about. There dealings with the networks was at best fragile,so i am not surprised the decision that they have ALL,not just one pulled the pin. Ask yourself why P4U. Shambolic company run by people who just in for a quick quid. That said i do del for the staff at store level.
  • shiftynifity
    Rusty….Rusty Spelling mistakes and grammar more like…and you were a manager…!!
  • Mike H.
    Phones4noone

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