Thousands of jobs have been put at risk as retailer Phones 4U enters administration.
The company, owned by private equity firm BC Partners, announced that it would be closing its 550 stores on Monday (September 15th) as its woes continued. The latest statement comes after Phones 4U failed to secure a new contract with mobile network EE, following a similar decision made by Vodafone earlier in September.
Phones 4U currently employs 5,596 members of staff and described the decision of EE and Vodafone to not renew as "a complete shock". The company added that it had only received EE's decision late on Friday (September 12th) and has put the future of a firm making profits of over £100 million in jeopardy.
Stefano Quadrio Curzio, from BC Partners, said: "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."
Mr Curzio added that Phones 4U had been in a healthy position, with both EE and Vodafone indicating that they classed the firm as a long-term partner. However, this view has changed significantly in recent days and both the network providers have performed a U-turn on their view. EE stated that the move was "driven by developments in the marketplace".
Phones 4U confirmed that customers with established mobile contracts taken out through it would not be affected but those who had ordered phones which had not been dispatched yet, including the new iPhone 6, would be affected.
The demise of Phones 4U is just one in a long line of high street businesses falling into administration following the likes of Barratts and Blacks Leisure.
Find up to date information on spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.