23rd Sep 2014 10:57
NEWBURY (Alliance News) - Phones 4u Ltd.'s administrator said that the company will close 362 stores and cut 1697 jobs.
Phones 4u collapsed last week after failing to reach agreements to sell the services of mobile phone network companies Vodafone Group PLC. (VOD.L, VOD) and EE Ltd.
Rob 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. We will make every effort to help the affected staff, working with the Phones 4u HR team over the coming days to support employees." PricewaterhouseCoopers LLP, which was appointed administrator last week, said the sale of an additional 198 P4U stores and 160 concessions to former carrier partners EE Ltd., Vodafone Group PLC and retailer Dixons Carphone PLC has been approved by the courts. The buyers will take on about 2,000 staff members.
The company is selling stores and inventory and eliminating employees after EE and Vodafone reportedly said they wouldn't renew their contracts with the store, depriving the retailer of the source of 90% of the plans it sells.
PwC stated that Another 720 people have been retained in the short term to assist with the closure programme.
The Phones 4u administrators also confirmed that a deal has been agreed with EE which will see the mobile network firm pay 2.50 million pounds to acquire 58 Phones 4u stores, preserving 359 jobs. The stores will be re-branded to EE in due course. The transaction 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.
EE is also reportedly considering a bid for the Phones 4u Life business, a reseller of EE's service.
On 19 September, the company had eliminated 628 employees who worked at the head office and in sales, and retained more than 400 employees to continue to support and assist the administrators in their duties.
The P4U administrators confirmed on 19 September that a deal had been agreed with Vodafone UK which would see the mobile network firm take on 140 of the Phones 4u stores together with preservation of 887 jobs for store employees across the UK.
Dixons Carphone, the London-based electronics retailer that agreed last week to take on 800 Phones 4u employees, is in negotiations to buy some Phones 4u stores, report said.
Copyright RTT News/dpa-AFX
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