Distributor Tech Data Mobile is said to be facing significant losses following the closure of Phones 4u, whilst manufacturers including Samsung, Nokia, Sony and HTC are threatened with losses in the millions, industry sources claim.
Tech Data Mobile’s three-year distribution deal with Phones 4u, which it won early last year, was considered one of the most lucrative in mobile distribution. It involved all warehousing activities for Phones 4u’s 700-plus branches, as well as fulfilment for its web and telesales businesses.
The distributor is said to hold several million devices at any one time in its Magna Park warehouse for Phones 4u. All stock will now be sequestered by Phones 4u’s administrators at Tech Data Mobile’s warehouse, whilst they look for buyers for the business.
‘This is such bad news for Tech Data Mobile. The Phones 4u contract is huge and not easily replaced,’ said one technology MD.
Mobile manufacturers are also facing losses. With most operating on 60-90 day payment terms, they are calculated to be owed several million pounds in payments by Phones 4u.
Phones 4u’s demise will also impact significantly on sales of Apple’s iPhone 6 devices as the retailer had already taken significant pre-orders for the new devices.
Samsung’s deal with Phones 4u to roll out 15 branded high street stores, staffed by Phones 4u staff, which was signed this year, has also been hit by Phones 4u’s closure.
Nokia and Sony also face the prospect of falling sales. Both manufacturers had close trading relationships with Phones 4u, involving exclusive deals and preferential conditions, which took precedence over their relationships with Carphone Warehouse.
One manufacturing MD said: ‘Nokia and Sony chose Phones 4u over Carphone so their relationship with Carphone is very poor. They will face an uphill struggle to get in with Carphone now.’
Another manufacturer source told Mobile: ‘The only winners in this are Carphone and the operators.’
Tech Data Mobile was unavailable for comment. Samsung, Sony, Nokia and Apple declined to comment.