Phones 4u to axe 1,700 jobs

Tuesday 23 September 2014

Beleaguered mobile phone retailer Phones 4u is to close 362 stores, with the loss of nearly 1,700 jobs, administrators have said.

A further 720 staff have been retained to assist with the closure programme, PwC said. It comes after Phones 4u went into administration last week following network operator EE's decision not to renew its contract.

Following talks with Phones 4u staff, a PwC spokesman said: "It is a very sad day for the staff working at those locations and our thoughts are with them."

Phones 4u had an annual turnover of £1 billion, with more than 700 stores and a total of 5,596 employees. But the firm collapsed as EE and Vodafone pulled out of long-standing deals to sell devices through the retailer.

Yesterday, EE said it would buy 58 Phones 4u stores in a deal saving more than 350 jobs. The agreement with administrator PwC comes after Vodafone said on Friday it would buy another 140 stores, safeguarding 887 jobs.

Dixons Carphone has already said it will take on the 800 staff who worked at 160 Phones 4u sites within Currys/PC World stores.

Rob Hunt, joint administrator and PwC partner, said last night: "It is with much regret that we have today made the difficult decision to close a large number of stores.

"It is a very sad day for the staff working at those locations and our thoughts are with them. We will make every effort to help the affected staff, working with the Phones 4u HR team over the coming days to support employees."

Breakdowns of stores closing will be available today, administrators said.

Entrepreneur John Caudwell, who set up the operation in the 1980s before selling it for £1.5 billion in 2006, called the behaviour of the networks ''extremely callous, extremely ruthless''.

Vodafone said it rejected any suggestion that it behaved inappropriately during its negotiations with Phones 4u and indicated that the private equity-owned firm's debt repayment schedule hampered the discussions.

However, this was rejected by BC Partners in a statement last week. EE said its decision not to renew its contract, which ran until September 2015, was in part driven by uncertainty over the long-term viability of Phones 4u. Its decision triggered the collapse of Phones 4u as it left the retailer without a single network partner.