Phones 4u collapse prompts Fears and Accusations

Posted on 16 September, 2014 by Neil Bird

The collapse of Phones 4u has left its 6,000 staff fearing for their jobs as its 550 stores remain closed this morning. The impact is greatest in North Staffordshire where staff were sent home from the company’s headquarters yesterday and told to wait for further announcements.


Administrator Pricewaterhouse Coopers (PwC) is currently involved in discussions with suppliers and potential buyers but the prospect of the business – founded in 1996 by Potteries entrepreneur John Cauldwell – being sold intact appears remote.

Staff were shocked by the news, which began to emerge on Sunday evening but only became clear when they turned up for work yesterday morning.

For one worker, who asked not to be named,  the news came as a particular blow as he was made redundant from a previous job last year.

“No-one expected this,” he said. “On Friday everything was normal. When I got this job I thought I was secure. It’s unbelievable this could happen to a company like Phones 4u.

“I don’t know what’s going to happen now, but I expect I’ll have to start looking for another job and there aren’t that many jobs around in Stoke-on-Trent.”

Another, who joined a group of staff in a local pub after being sent home, said he was “gutted” and that he wasn’t sure how long the administrators would continue paying wages.

Phones 4u’s Lymedale Business Park headquarters is in the Newcastle-under-Lyme constituency of Paul Farrelly MP, and he is concerned about the future of the firm’s 1,000 local workers.

“It’s a real tragedy for the staff at the headquarters in Chesterton, who are going to be the most vulnerable now the company is in administration,” he told the Sentinel.

“It’s likely that any buyer will only be looking to pick and choose Phones 4u shops to take over.

“What we need to do locally is work together to find alternative ways for the headquarters staff to use their skills and experience.”

Management have blamed the collapse of the company on mobile networks EE and Vodafone who have both announced that they will not renew their contracts as retail partners.

Caulwell, who sold the company in 2006, yesterday tweeted that he was “sickened and saddened” for Phones 4u staff who he described as “wonderful.” And, along with the current management, he was clear who he held responsible for the collapse, using the hashtags #ruthlessvodafone and #ruthlessEE.

However, others have questioned the role of owners BC Partners prior to Phones 4u entering administration, particularly the dividend they took which has added to the debt facing the company.

“Questions must be asked of the owners’ decision to take £200m out of the business shortly before it went into administration making 6,000 people redundant,” said shadow telecoms minister Helen Goodman.

“It seems that, as with Southern Cross, we see private equity happy to take the profits but laying out the risks on to others.”

Last year Phones 4u reported sales totalling £1 billion. Today, with little interest expected from rivals, the most likely scenario seems to be the break-up of its store portfolio – and an uncertain future for its North Staffordshire staff.

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