PracticeAccounting FirmsPwC administrators confirm sale of Phones 4U stores

PwC administrators confirm sale of Phones 4U stores

EE and Vodafone snap up Phones 4U stores in deals agreed with administrators from PwC

PwC administrators confirm sale of Phones 4U stores

THE ADMINISTRATORS of stricken mobile phone retailer Phones 4U have confirmed the sale of 58 stores to mobile network EE, a week after the high street chain was placed into administration.

Under the deal, agreed by joint administrators at PwC, EE will pay £2.5m for the stores, preserving 359 jobs. The transaction follows Friday’s announcement that Vodafone has agreed to acquire 140 Phones 4U stores and re-employ 887 staff.

The transaction with EE includes Phones 4U’s interest in the 58 stores’ leasehold properties and their fixtures and fittings and various associated contractual rights and obligations, but does not include store inventory, which will be recovered and realised separately by the administrators, PwC said.

“As with the Vodafone transaction, we consider that this represents the best potential outcome for creditors in the circumstances, although it remains subject to the approval of the UK courts,” said Rob Hunt, joint administrator and PwC partner.
Retailer Dixons Carphone has previously said it will take on 800 Phones 4U staff employed at 140 concessions within Currys and PC World stores.

Last week, Phones 4U collapsed into administration after EE joined Vodafone in severing its ties with the retailer. O2 ended its relationship with Phones 4U earlier this year.

A bitter war of words between the retailer and the networks quickly ensued.

Stefano Quadrio Curzio, representative of Phones 4U’s private equity owner, BC Partners, accused Vodafone of severing its ties in a way “designed to inflict the maximum damage to their partner of 15 years, giving Phones 4U no time to develop commercial alternatives”.

“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,” he said.

In response, Vodafone suggested BC Partners had saddled the business with too much debt – in the form of high interest payment-in-kind notes making it difficult for management to negotiate a new contract.

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”.

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