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Phones 4U poised to enter administration as it loses EE deal | |
(about 7 hours later) | |
Retailer Phones 4U is to fall into administration putting 5,596 jobs at risk. | Retailer Phones 4U is to fall into administration putting 5,596 jobs at risk. |
The chain, which is owned by private equity firm BC Partners, said its 550 stores would all be closed on Monday. | The chain, which is owned by private equity firm BC Partners, said its 550 stores would all be closed on Monday. |
Phones 4U blamed the move on mobile network EE's decision not to renew its contract, which followed a similar decision from Vodafone. | |
"If mobile network operators decline to supply us, we do not have a business," said Phones 4U boss David Kassler. | "If mobile network operators decline to supply us, we do not have a business," said Phones 4U boss David Kassler. |
The company said all mobile contracts taken out through it would not be affected, | |
It also said staff should turn up to work as normal, when they would be given further details and staff would "continue to be paid until further notice". | |
A spokesperson for EE said the decision not to renew its contract with Phones 4U was "driven by developments in the marketplace that have called into question the long term viability of the Phones 4U business". | A spokesperson for EE said the decision not to renew its contract with Phones 4U was "driven by developments in the marketplace that have called into question the long term viability of the Phones 4U business". |
The spokesperson added that the decision was also "in line with our strategy to focus on growth in our direct channels". | |
'Sad day' | 'Sad day' |
Mr Kassler, chief executive of Phones 4U, said it was a "very sad day" for both customers and staff. | Mr Kassler, chief executive of Phones 4U, said it was a "very sad day" for both customers and staff. |
"A good company making profits of over £100m, employing thousands of decent people has been forced into administration," he added. | "A good company making profits of over £100m, employing thousands of decent people has been forced into administration," he added. |
The firm said EE and Vodafone's decisions not to renew their contracts had come as "a complete shock". | The firm said EE and Vodafone's decisions not to renew their contracts had come as "a complete shock". |
Phones 4U said it had only received EE's decision late on Friday. | |
It said PwC, which is expected to be appointed as administrator on Monday, would decide on whether the business could be reopened for trading. | It said PwC, which is expected to be appointed as administrator on Monday, would decide on whether the business could be reopened for trading. |
Phones4U was set up by the entrepreneur John Caudwell in the middle of the 1980s and sold for £1.5bn some 20 years later. | |
Phones 4u said it had been a profitable business, with turnover of £1bn, underlying profits £105m in 2013 and plenty of cash in the bank, but that without the contracts from the phone networks it no longer had a business. |