Phones4u go into administration

[The Game 161]

http://news.sky.com/story/1335864/retailer-phones-4u-forced-into-administration

 

[GadgetSN]

Never liked their stores but online they at least provided cheaper rates.

Wierd business model though. Use your commission from networks to undercut the networks direct pricing.

Will CPW follow soon?

 

[The Game 161]

Car phone warehouse and curry's/pc world are becoming one in October

 

[MRU]

Damn and i was only looking at getting an Alpha from them last week.

Never realised that EE was the biggest network in the UK ???? That to me was an even bigger surprise.

 

[Shanghaichica]

Damn and i was only looking at getting an Alpha from them last week.

Never realised that EE was the biggest network in the UK ???? That to me was an even bigger surprise.

I thought O2 were the biggest. However with EE being a merger between T - mobile and orange I suppose it makes sense.

 

[MRU]

Car phone warehouse and curry's/pc world are becoming one in October

Weird thing here is that we have dixons /currys/pcworld here in Ireland, and we also have carphonewarehouse. However carphonewarehouse here have gone into partnership (before dixons takeover was announced) with Harvey Norman. So in the nearest town to me (30 miles away) we have a Harvey Norman electronics store with carphonewarehouse - right next to a Currys/PC World ? I wonder what the story is for situations like this is going to be in the next 12 months ?

 

[The Game 161]

Funny thing is they were offering note 4 in gold exclusive

 

[The-Real-Deal82]

We had 6 people in our office who were sweating this morning after ordering iPhone 6's on Friday through Phones4U. I think existing transactions will be honoured though.

They messed me around with the iPhone 5 last time around and I cancelled the order. It put me off even checking them out in future and their stores were always very pushy. Sad for the people losing their jobs though, never nice. The message on their home page seems rather sad.

 

[Brian Y]

We had 6 people in our office who were sweating this morning after ordering iPhone 6's on Friday through Phones4U. I think existing transactions will be honoured though.

They messed me around with the iPhone 5 last time around and I cancelled the order. It put me off even checking them out in future and their stores were always very pushy. Sad for the people losing their jobs though, never nice.

From what news outlets are saying, they should be refunding pre-orders, but nobody will be getting phones.

However, once they've brought in the administrators, that may change. Ultimately they have no legal obligation, if they're in administration, they have no legal obligation to give you money back or a phone (one of the most retarded bits of UK law). The administrators will want to keep as much money as possible inside the business, probably so they can siphon more off for themselves.

 

[The-Real-Deal82]

From what news outlets are saying, they should be refunding pre-orders, but nobody will be getting phones.

However, once they've brought in the administrators, that may change. Ultimately they have no legal obligation, if they're in administration, they have no legal obligation to give you money back or a phone (one of the most retarded bits of UK law). The administrators will want to keep as much money as possible inside the business, probably so they can siphon more off for themselves.

Oh right okay, well at least they will get their money back touch wood. Its a pain for those who pre ordered though as they may be waiting a few extra weeks now. We were chatting about it this morning and they all used credit cards to pay so this should provide extra coverage I would hope.

EDIT: Just found this but it may have changed since it was published last night.

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.

http://www.telegraph.co.uk/finance/...ation-as-EE-is-final-operator-to-hang-up.html

 

[JaySoul]

Got one near that I pass every day and it was getting increasingly less busy by the week for the past few months.

Bit of a strange business model, unfortunately.

 

[Brian Y]

Oh right okay, well at least they will get their money back touch wood. Its a pain for those who pre ordered though as they may be waiting a few extra weeks now. We were chatting about it this morning and they all used credit cards to pay so this should provide extra coverage I would hope.

EDIT: Just found this but it may have changed since it was published last night.



http://www.telegraph.co.uk/finance/...ation-as-EE-is-final-operator-to-hang-up.html

Rumours are that PWC are the appointed administrators, and given how they handled Jessops' closure (e.g. not giving back cameras that they had taken in for repair!) I would prepare for not getting nothing back. CC chargeback is probably the best way to go.

 

[apolloa]

Vodafone pulled out from Phones4U because it has signed an exclusive deal with CPW, so that will be am impartial store now then

Three pulled out to sell more online and in their own stores, O2 pulled out claiming P4U contracts only made up about 8% of their business.

EE became the UK's biggest network when Orange and T-Mobile joined up, they pulled out stating they too want to sell more themselves and they didn't like Phones4U business model??

And thus around 6000 people are potentially out of a job from a business with healthy books making around 100 million pounds profit. Utter madness but that's capitalist business for you I guess?

 

[Shanghaichica]

Funny thing is they were offering note 4 in gold exclusive

Hopefully that means that all the carriers will get it.

 

[Tsuchiya]

For those who don't know, the fairly new owners of P4U utterly screwed the company over.

They loaded it up with debts to receive some kind of dividend (no idea how that was meant to work), and now they want to complain about Vodafone dropping out?

Dick move. Those same owners look to make a multi-million pound profit even if the company sinks (along with 5000+ of its workers).

The abrupt failure at Phones 4U, the British retailer founded by entrepreneur John Caudwell, has sparked a heated blame game between the group’s private equity owner and its former mobile operator partners.

Phones 4U went into administration on Sunday night after EE and Vodafone, two of the UK’s largest mobile phone operators, decided to withdraw their products from its stores next year.

The move has put at risk the jobs of almost 6,000 people and the closure of 550 stores across the UK, marking the largest retail failure to hit Britain’s high streets since the demise of Comet in 2011.

Vodafone attacked Phones 4U’s owners, BC Partners, for allowing management “little commercial flexibility” to negotiate terms of its partnership “due to their debt repayment obligations”.

Despite the company’s troubles, BC Partners, which acquired Phones 4U in 2011 for about £600m, secured a 30 per cent profit on its investment thanks to a payout last year that was funded through raising debt on Phones 4U's balance sheet.

“Phones4U was offered repeated opportunities to propose competitive distribution terms to enable us to conclude a new agreement, but was unable to do so on terms which were commercially viable for Vodafone in the current UK market conditions,” the mobile operator said in a statement.

“We were told by the Phones4U management team that they had little commercial flexibility due to their debt repayment obligations, but that they had a number of alternative strategies in place if we couldn’t reach an agreement with them. It is now clear based on the events that have transpired that there were no viable alternative plans in place.”

The statement was made in response to criticism of Vodafone’s decision to withdraw by BC Partners.