Belfast Telegraph

96 Northern Ireland jobs in jeopardy after Phones 4U collapse

By Clare Weir

Nearly 100 jobs in Northern Ireland are at risk after mobile phone company Phones 4U went into administration.

Directors of the Staffordshire-based company, which is owned by private equity firm BC Partners, closed its 550 UK stores yesterday ahead of the appointment of PwC.

A PwC spokesman said there are 16 outlets across Northern Ireland with 96 staff – 12 are standalone shops employing 75 people, with another four concessions within Dixons Carphone stores, with a total of 21 staff.

Phones 4U blamed the collapse on mobile network EE's decision not to renew its contract, which followed a similar move from Vodafone earlier in September.

The future for the company looks bleak pending a decision by PwC on whether the business can be reopened for trading.

The corporate restructuring team from PwC said it was hopeful that it will be able to pay all the outstanding wage arrears but that this was dependent on accessing funds to pay for the costs of the business.

PwC partner Rob Hunt said: "Our initial focus will be to quickly engage with parties who may be interested in acquiring all or part of the business, and to better understand the financial position and options for the company.

"The stores will remain closed while we have these conversations. We will also be talking to network operators and suppliers, and trying to access funds to pay for the costs of the business, including wages."

Entrepreneur John Caudwell, who set up the operation in the 1980s before selling it for £1.5bn in 2006, said he was "sickened and saddened" for the nearly 6,000 staff who work at the firm.

Donald McFetridge, a retail analyst at the University of Ulster's Ulster Business School, said the closure of its 550 stores could leave more "black holes" in town centres. "While many consumers complain that our high streets are full of charity shops and mobile telephone shops, black holes are the last thing anyone wants to see – especially these days when black holes are hard to hide and even more difficult to fill.

"Consumers are, of course, looking for reassurance that contracts with their mobile operators will be honoured while employees must be shocked beyond all measure that 24 hours ago all seemed fine on the retail horizon.

"This is yet another sign of just how volatile trading conditions are in this sector of the retail marketplace and, many argue, is a portent of more bad news to come in the days leading up to Christmas 2014."

Glynn Roberts, chief executive of the Northern Ireland Independent Retail and Trade Association said that store closures reduce footfall for surrounding traders.

"Mobile phone shops are now a major part of our town centre retail offer and so when a large chain like Phones 4U closes 15 stores in Northern Ireland, it has significant impact," he said.

Aodhan O'Donnell, interim chief executive of the Consumer Council, said that mobile contracts will be unaffected but that orders already placed for new phones, but not yet dispatched will be cancelled and Phones 4U should refund any money paid.

"In the meantime, we would recommend that customers gather together any paperwork they have in relation to transactions with the company and keep these in a safe place until announcements have been made by the administrator," he said.

Belfast Telegraph