EE enters the fray as the latest retailer circling Phones 4u

MOBILE phone operator EE is the latest company in talks to potentially take over stores from Staffordshire-based retailer Phones 4u, which collapsed into administration last week.

Reports over the weekend suggested EE was in talks with administrators to broker a deal which could see it take on around 60 of the Phones 4u stores.

Neither EE nor the administrators have confirmed details but PwC, which is acting as administrator, has said it is in talks with various interested parties.

The move comes after rival operator Vodafone agreed a deal late on Friday to take over 140 of the Phones 4u stores, saving 887 jobs.

However, the move came too late to save 628 people employed at the Phones 4u head office in Newcastle-under-Lyme, who were told on Friday after noon they were being made redundant as the administrators looked to strip costs out of the business to make it more attractive to potential buyers.

More than 400 staff have been retained at the head office for the time being in order to assist administrators.

Earlier in the week Dixons Carphone had agreed to offer jobs to the 800 people who had worked in Phones 4u concessions in its stores.

However, the fate of thousands more workers employed at the Phones 4u store network has yet to be decided.

The company was forced into administration last week after service providers EE and Vodafone said they would not be renewing service agreements with the retailer.

In a statement on Friday, administrators said: “Following discussions with parties expressing an interest in the Phones 4u business, the administrators have made the difficult but necessary decision to undertake a restructuring exercise at the company’s head office.

“This restructuring reflects the nature of the expressions of interest in the business, and therefore the need to cut costs in the business.  Unfortunately this has led to 628 redundancies, with more than 400 employees being retained to continue to support and assist the administrators in their duties.”

The administrators said they had asked the thousands of store workers to remain at home until negotiations were resolved one way or the other.

Rob Hunt, joint administrator and PwC partner said: “It is with great sadness and regret that we have today made the difficult decision to make 628 head office and telesales staff redundant.  Our thoughts are with those employees at this difficult time.  We will make every effort to help the affected staff, working with the Phones 4u HR team over the coming days to support employees.”

He said the terms of the deal with Vodafone would remain confidential, however, the move will see the 140 stores re-branded as Vodafone over the coming weeks.

The deal is understood to have been agreed between the parties but remains subject to the courts approving the release of the fixed charge security held on behalf of the secured creditors.  The administrators said they would be making an application to the court this morning (Monday) for the release of the fixed charge security that will enable the sale to be completed.   

“While this deal remains subject to the approval of the UK courts, we are confident that this represents the best available transaction for the company’s creditors,” added Hunt.