15th September 2014
Retailer Phones 4u has gone into administration putting nearly 5,600 jobs at risk after EE and Vodafone unexpectedly pulled their business from the group.
Vodafone ceased trading contrasts via Phones 4u two weeks ago and O2 and Three withdrew earlier in 2014. Phones 4u stated however the latest move from both EE and Vodafone has comes a complete shock as both companies had, according to a report in The Guardian, “consistently indicated that they saw Phones 4u as a long-term strategic partner”.
The firm did not open on Monday and its website has been taken offline. However some of the 550 stores across the country that remained closed today may reopen in the medium term believes Aviva Investors’ Chris Urwin, global research manager, real estate.
He said: “Other mobile phone vendors may expand to fill the void. Indeed, Vodafone already have significant expansion plans. But while the total presence of phone retailers does seem likely to fall, this should not be seen as another nail in the coffin for the UK high street.”
The group’s private equity owner, BC Partners, has said it would appoint PwC as administrators for its 720 outlets, including its 550 stand alone stores. BC originally bought the chain in 2011 in a £610m deal but business is presently sitting on debts of £635m.
Urwin asserted that while Phones 4u going into administration is a blow, it is one from which the UK high street is now strong enough to recover
He added: “We believe much of the pessimism around the future of the UK high street has been excessive. The difficulties of the UK high street have coincided with both the rise of internet shopping and a very sharp deterioration in household finances amid the worst economic slowdowns in a generation.
“In suggesting that the high street was in some kind of terminal decline, pessimistic commentators put too much emphasis on structural factors and too little on cyclical factors. As the economic and labour market recovery has taken root, this has been demonstrated to be the case. Vacancy rates in general are now declining in prime pitches and have stabilised even in softer markets. The vitality of many UK high streets is gradually increasing.”
Customers who purchased a mobile contract through Phones 4u in the past will remain unaffected and their service will carry on as normal.