Robert Jonathan Hunt, Ian David Green and Robert John Moran of PwC have today been appointed as administrators to Phones 4u Ltd, a leading independent mobile phone retailer with an annual turnover of £1bn, operating from more than 700 outlets with 5,596 employees
In addition to its retail operations, Phones4u also runs its own network operator, Life Mobile Ltd, which is also in administration.
Rob Hunt, joint administrator and PwC partner, said: ‘This is a very sad day for the business and the many people working there. In light of our impending appointment the directors understandably took the decision to close all the shops today and sent many staff home.’
The decision to go into administration follows news late last week that network operator EE will not be renewing its contact with Phones4u when it expires in a year’s time. Vodafone said earlier this year it had decided to end its contract with the firm.
P4U described the decisions by both networks not to renew their current contracts with the retailer as ‘unexpected’ and ‘a complete shock to the business’. In a statement, the company said: ‘However, following the decisions of Vodafone and EE, Phones 4u has no option but to seek the appointment of administrators from PwC.’
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 £100m, 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.’
Hunt said the administrators’ 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 during these discussions.
‘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,’ Hunt said.
A spokesperson for EE said the decision not to renew its contract with Phones4u was in line with its strategy of focusing on its direct channels and ‘driven by developments in the marketplace that have called into question the long term viability of the Phones 4u business’.
