Phones 4u has confirmed that the business has entered administration following EE’s decision to cut ties with the firm.
The retailer said in a statement that it found itself suddenly in a position where it would be without a mobile network partner when its current contracts with EE and Vodafone expired. Adding that the unexpected decisions by both networks had come as a complete shock to the business.
Phones 4u said that it had no option but to seek the appointment of administrators and that stores would be closed pending a decision by the administrators on whether the business could be reopened for trading.
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.’
Stefano Quadrio Curzio, representative of BC 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.’
The retailer also said that the company was in a healthy state and both EE and Vodafone had, until very recently, consistently indicated that they saw Phones 4u as a long-term strategic partner.
The retailer explained how the news would effect its staff and customers and said in a statement: 'As the news from EE was only received late on Friday, all Phones 4u employees will report to work as normal today and will be briefed by management. This will happen at all store locations and head office. It is intended that employees will continue to be paid until further notice.
'All mobile contracts historically bought through Phones 4u remain unaffected and the networks will continue to provide mobile services to these customers.
'The retail shops will not be trading today and the administrator will decide the future of store trading in due course.'