The administration of mobile phone retailer Phones4U has resulted in a number of redundancies as a restructuring process begins.
Yesterday (23 September) administrators confirmed the closure of 362 Phones4U stores following “limited interest” in a sale, resulting in 1,697 redundancies. 720 staff have been retained “in the short term to assist with the closure programme”.
Robert Hunt, joint administrator and PwC partner, said: “It is with much regret that we have today made the difficult decision to close a large number of stores. It is a very sad day for the staff working at those locations and our thoughts are with them.”
After the retailer fell into administration last week [LINK], there have been strong statements from both the company and its suppliers regarding who should shoulder the blame for the insolvency.
On Friday (19 September), administrators confirmed the decision to undertake a “restructuring exercise” at the company’s Newcastle upon Lyme head office, resulting in 628 redundancies, while 400 staff have been retained.
On the same day it was announced that retailer Dixons Carphone had agreed a deal to transfer over 800 staff working at Phones 4U concessions within Currys and PC World outlets, while Vodafone announced it would take over 140 Phones4U stores, preserving 887 jobs.
Yesterday (22 September), administrators also announced a further deal with network supplier EE to acquire 58 Phones4u stores in a £2.5m deal that will secure 359 jobs, including Phones4U’s interest in the 58 stores’ leasehold properties but not store inventories.
Hunt said: “We are absolutely delighted to have completed this further disposal of 58 Phones 4u stores, which will both recover value for secured creditors and save 359 jobs.
“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.”
On 17 September, Dan Schwarzmann, Douglas Rackham, Robert Hunt and Ian Green of PwC were appointed as joint administrators to Phones4U’S insurance arm, Policy Administration Services Limited (PAS).
London General Insurance Company Limited, the insurer of the plans sold by PAS, is outside the Phones4U group and is unaffected by the administration process.
Schwarzmann, partner at PwC, said: “We would like to reassure all policyholders with an active Phones 4u Care or Premierplan mobile phone insurance policy that your policy remains in force in accordance with its terms and conditions.
“Your insurance premiums are safe and we are working with London General to maintain claims and related services under your policy.
“Unfortunately there will be some unavoidable short-term disruption to the normal customer service and claim processes. We apologise for any inconvenience that this will cause.”
Robert Hunt and Karen Dukes of PwC were profiled in the August edition of Credit Today