Phones 4u in crisis as networks hang up
MOBILE phone retailer Phones 4u, the sponsor of the Manchester arena, is set to close its 550 stores after it went into administration.
The retailer lost a key contract with EE last week, soon after losing one with Vodafone, and despite being a profitable business, with turnover of £1bn and underlying profits of £105m in 2013, it says without the contracts from the phone networks it can no longer operate.
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 £100m, employing thousands of decent people has been forced into administration.”
Joint administrator Rob Hunt, of PwC partner, said: “Our initial focus will be to quickly engage with parties who may be interested in acquiring all or part of the business, and to better understand the financial position and options for the company.
“The stores will remain closed while we have these conversations. We will also be talking to network operators and suppliers, and trying to access funds to pay for the costs of the business, including wages.
“These conversations will determine whether we can re-open stores and trade, and also if and when we can pay the arrears of wages to employees. Our hope is that we will be able to pay all the outstanding wages arrears.”
The Newcastle-under-Lyme based firm employs 5,596 people and all their jobs are now at risk. The chain was owned by private equity firm BC Partners.
Phones 4u was set up by the entrepreneur John Caudwell in the mid-1980s and sold for £1.5bn some 20 years later.
By the time he sold it, it was selling 26 phones a minute and employed 10,000 people. It generated sales of more than £2.25bn.
The Cheshire-based tycoon said on Twitter he was “sickened and saddened” for the staff affected.
The company’s sponsorship deal with SMG Europe for the Manchester arena, one of the most successful indoor entertainment venues in the country, is due to run to 2018.
