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| Phones 4u enters administration: Over 5,000 jobs at risk | |
| (about 5 hours later) | |
| Phones 4u is to go into administration - placing more than 5,500 jobs at risk - after network operator EE joined Vodafone in cutting ties with the retailer. | Phones 4u is to go into administration - placing more than 5,500 jobs at risk - after network operator EE joined Vodafone in cutting ties with the retailer. |
| The company said its stores will be closed on Monday pending a decision by the administrators on whether the business can be reopened for trading. | The company said its stores will be closed on Monday pending a decision by the administrators on whether the business can be reopened for trading. |
| 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. | 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. | The company, which is owned by private equity firm BC Partners, has 550 standalone stores, employing 5,596 people. |
| Phones 4u chief executive David Kassler said: "Today is a very sad day for our customers and our staff. | Phones 4u chief executive David Kassler 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. | "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 the UK." | "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 the UK." |
| Staff have been asked to report to work as normal on Monday morning as they will be briefed by management. | Staff have been asked to report to work as normal on Monday 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. | 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. | 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. |
| It added: "The unexpected decisions by both Vodafone and EE have come as a complete shock to the business. The company is in a healthy state and both EE and Vodafone had, until very recently, consistently indicated that they saw Phones 4u as a long-term strategic partner." | It added: "The unexpected decisions by both Vodafone and EE have come as a complete shock to the business. The company is in a healthy state and both EE and Vodafone had, until very recently, consistently indicated that they saw Phones 4u as a long-term strategic partner." |
| The end of Vodafone's relationship with Phones 4u in February will see it enhance its distribution partnership with Dixons Carphone - the business recently created from the merger of Carphone Warehouse with the owner of PC World and Currys. | The end of Vodafone's relationship with Phones 4u in February will see it enhance its distribution partnership with Dixons Carphone - the business recently created from the merger of Carphone Warehouse with the owner of PC World and Currys. |
| The Vodafone tie-up with Phones 4u represented some £212m of sales and about £18.m of earnings in the year to July 31. | The Vodafone tie-up with Phones 4u represented some £212m of sales and about £18.m of earnings in the year to July 31. |
| Stefano Quadrio Curzio, a representative of BC Partners, said: "Our overriding concern is for all the dedicated, hard-working employees of Phones 4u at a time of uncertainty for the company.” | Stefano Quadrio Curzio, a representative of BC Partners, said: "Our overriding concern is for all the dedicated, hard-working employees of Phones 4u at a time of uncertainty for the company.” |
| He added that the board had “no alternative but to seek the administrator's protection in the interests of all its stakeholders”. | He added that the board had “no alternative but to seek the administrator's protection in the interests of all its stakeholders”. |
| 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. | 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. |
| The process of appointing PwC as an administrator is expected to take place on Monday. | The process of appointing PwC as an administrator is expected to take place on Monday. |