PwC lined up as Phones 4U administrator

PHONES 4U, the mobile phone retailer that collapsed into administration on Sunday, has said it intends to appoint PwC as administrators for its 550 stores following the loss of a key contract with EE.

PwC has been lined up as administrations by Phones 4U’s private equity owner, BC Partners, after the retailer said it was forced to close its stores after mobile network EE joined Vodafone in severing its ties with the high street chain.

The retailer said the decision by EE to not renew its current contract – which follows a similar move by Vodafone last month – came as a “complete shock”. O2 ended its relationship with Phones 4U earlier this year.

The move led to Phones 4U closing all its stores, which employ around 5,600 people, until a decision is made by the administrators on whether the business can 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 £100m, employing thousands of decent people has been forced into administration.”

Phones 4U said the business, which has a turnover of over £1bn, is in a “healthy state” and that both EE and Vodafone had, until very recently, consistently indicated that they saw Phones 4u as a long-term strategic partner.

“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,” said Stefano Quadrio Curzio, representative of BC Partners.

In a statement, EE said the decision not to renew its contact, which has more than a year to run, was “driven by developments in the marketplace that have called into question the long-term viability of the Phones 4U business” and that it was in line with its strategic focus to “focus on growth in our direct channels and to move to fewer, deeper relationships in the indirect channel”.

The process of appointing an administrator is underway and it is expected that this will take place later today.

PwC said: “In relation to Phones 4U’s statement yesterday, the directors of the company are today seeking to appoint partners and directors from PwC as administrators. No further comment will be made by PwC unless we are appointed by the court as administrators.”

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