Phones 4U enters administration

Phones 4U says it has been ‘forced’ into administration after phone contract networks Vodafone and EE turned their back on the retailer.

It’s been a disastrous few months for the firm after Vodafone withdrew from its stores, and Currys/PC World announced plans to pull the Phones 4U concessions from its shops following the Dixons Carphone merger.

Now network provider EE has decided not to renew its current contract with Phones 4U, which ends in September 2015, leaving the retail chain without a single network provider, reports Sky News.

Phones 4U is expected to appoint PwC as administrator on Monday, and says its 550 stores will be closed until the administrators decide if it can continue trading.

The retailer employs 5,596 staff, who will be told the news at work on Monday morning. Phones 4U has also told its customers that mobile contracts already bought through the retailer will continue as normal.

Such a sad day for @Phones4u and all its employees! Brought to its knees by ruthless so called 'partners' moving in for the kill!!!

— John Caudwell (@JohnDCaudwell) September 14, 2014

Phones 4U CEO 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 and 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."

As of Monday morning, the Phones 4U website has been taken down and replaced with a brief message from the ‘heartbroken’ Phones 4U team along with a sad face emoticon: "Following the unexpected decision of EE and Vodafone to withdraw supply from Phones4U , we regret that we are offline. Please accept our apologies and we will update you as soon as possible."

Stefano Quadrio Curzio, from Phones 4U’s private equity owner BC Partners, added: "Our overriding concern is for all the dedicated hardworking employees of Phones 4u at a time of uncertainty for the company.

"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.

"EE’s decision 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."

To our customers, following the unexpected news we are now offline. http://t.co/UNyJqK7k7q Thank you, The heartbroken Phones 4u Team.

— Phones 4u (@Phones4u) September 15, 2014

A spokesperson for EE commented: "In line with our strategy to focus on growth in our direct channels and to move to fewer, deeper relationships in the indirect channel, and driven by developments in the marketplace that have called into question the long term viability of the Phones 4U business, we can confirm that we have taken the decision not to extend our contract beyond September 2015.

"We will monitor developments and work to provide any necessary support for customers who joined EE through Phones 4U."

Former Phones 4U owner John Caudwell said on Twitter: "Such a sad day for Phones 4U and all its employees. Brought to its knees by ruthless so called ‘partners’ moving in for the kill.

"Unfortunately a combination of short term private equity strategy combined with ruthless network ‘partners’ and government killed Phones 4U."