Phones4U

Phones 4U forced into administration as EE pulls out

Last updated:

Retailer’s 720 outlets will not open on Monday, with 5,596 staff to be briefed by management

Phones 4U fell into administration on Sunday night after its last remaining mobile operator partner, EE, cut ties with the retailer. Phones 4U has 720 outlets, including 550 standalone stores, and employs 5,596 people. Staff will be briefed by management in stores and at head office on Monday morning. BC Partners, Phones 4U’s private equity owner, said it is “intended that employees will continue to be paid until further notice”.

Mobile industry sources said EE informed Phones 4U of its decision last week. Phones 4U stores will be closed pending a decision by the administrators on whether they can be reopened for trading. Mobile contracts signed through the retailer will be unaffected.

O2 pulled out in February while Vodafone said it would not renew its contract with the retailer earlier this month. EE made its decision after a strategic review amid concerns that Phones 4U was selling for only one of Britain’s main mobile operators. It was felt this reduced its appeal for customers who wanted to compare the prices of different operators.

Stefano Quadrio Curzio of the private equity firmBC Partners said:

“Our overriding concern is for all the dedicated hard-working 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 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.”

David Kassler, chief executive of Phones 4U, 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.

“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.”

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