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Phones 4U poised to enter administration as it loses EE deal Phones 4U poised to enter administration as it loses EE deal
(35 minutes 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.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, The company said established mobile contracts taken out through it would not be affected, although phones ordered and not despatched - for example anyone ordering the new iPhone 6 over the weekend - would be. A customer service line will be open from Monday at 09:00.
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".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".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.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. Stefano Quadrio Curzio, from BC Partners, said: "Vodafone has acted in exactly the opposite way to what they had consistently indicated to the management of Phones 4U over more than six months. Their behaviour appears to have been designed to inflict the maximum damage to their partner of 15 years, giving Phones 4U no time to develop commercial alternatives.
Phones4U was set up by the entrepreneur John Caudwell in the middle of the 1980s and sold for £1.5bn some 20 years later. "EE's decision on Friday is surprising in the context of a contract that has more than a year to run and leaves the board with no alternative but to seek the administrator's protection in the interests of all its stakeholders."
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. PwC, which is expected to be appointed as administrator on Monday, will decide on whether the business can continue to trade.
Phones 4U 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.
Are you a Phones 4U employee? You can email your experiences to haveyoursay@bbc.co.uk