Vodafone is looking to close 24 duplicate stores across the UK as it consolidates its retail portfolio.
The move follows Vodafone’s acquisition of 140 Phones 4u stores last September, following the retailer’s collapse, which came shortly after Vodafone and EE terminated their trading agreements with the company.
Vodafone is planning a rolling programme of closures in duplicate locations. The strategy is aimed at preventing duplication, with all 24 Vodafone store closures located in towns where the operator has bought Phones 4u stores in prime locations.
The stores are located in towns across the UK, including Birmingham, Colchester, Gloucester, Leicester, Lincoln, Newcastle-upon-Tyne, Plymouth and Wolverhampton.
Vodafone’s plans to close the 24 duplicate stores have had to be approved by the Competitions and Markets Authority (CMA), which is conducting an investigation into Vodafone’s acquisition of Phones 4u stores last year, which was launched following the retailer’s demise last September.
The CMA’s brief is to decide whether Vodafone’s acquisition of 140 former Phones 4u stores will hamper competition in the UK’s mobile market. Under the rules of the investigation, Vodafone is unable to dispose of any of its Vodafone or former Phones 4u stores until the investigation is completed.
However, the CMA has waived the rules following a request by Vodafone to begin a rolling programme of duplicate store closures this month. In its letter to the CMA, Vodafone argued that it needed to take ‘immediate action’ to avoid retaining ‘unnecessary store locations’ or empty stores, listing 24 Vodafone stores.
In response to Vodafone’s request, the CMA stated: ‘After due consideration of Vodafone’s request for derogations to the Initial Enforcement Order, in particular taking into account the burden on Vodafone and the current stage of the CMA’s analysis in this merger, the CMA consents that Vodafone may carry out (its plans for the 24 stores).’
The CMA’s decision to grant the derogation is positive news for Vodafone, with sources claiming it could indicate that the CMA investigation will find in favour of the operator. One source said: ‘This investigation is at Stage One. Only a minority of mergers go through to Stage Two. The fact that Vodafone has been granted this derogation at this stage of the investigation could be taken positively by Vodafone.’
The CMA is preparing to publish its findings next week. If it finds in favour of Vodafone the case will be closed. If not, then the CMA will launch a second stage investigation, which could run for months.
The CMA declined to comment on the case. A Vodafone spokesman said: ‘As a national retailer, we need the flexibility to be able to review our store locations and make changes if necessary. The derogation agreement with the CMA gives us the ability to do this, should there be a need.’
The spokesman added that there will be no redundancies as a result of the 24 store closures, adding they would not close 'immediately.' However he did not give a timetable for the closures.
He added that the derogation had been granted by the CMA to prevent Vodafone from being forced to maintain long term leases on stores it did not want to retain.