back to article Phones 4u website DIES as wounded mobe retailer struggles to stay above water

Phones 4u's website is currently telling customers that it is unable to trade due to "the unexpected decision of EE and Vodafone to withdraw supply" from the retailer. It comes after the High Street firm, which has 550 stores throughout the UK and 5,596 employees on its books, confirmed late on Sunday that it had fallen into …

  1. James 51 Silver badge

    Always thought phones4u was a bit more expensibe than CPW but the lack of competition can't be good.

    As for who said what to whom and why they had to close now, I am sure it will all come out in the lawsuits.

    1. Bob Vistakin
      Holmes

      Lack of competition? A stroll down any high street says otherwise - you can't move for O2/Orange/EE/Voda pop up shops. So why on earth is this news of them cutting out a pointless middleman a surprise again?

      Anyway, surely this too means the death of the wretched carphonewhorehouse which can be no bad thing at all.

    2. LarsG

      No doubt some enterprising staff will attempt to sell the stock from the street corner to ensure they make up their minimum wage that they have not been paid.

      I wouldn't blame them.

      1. Marvin O'Gravel Balloon Face

        Maybe that's why they were told not to come into work...

      2. Intractable Potsherd Silver badge

        I got my last phone from Phones4U, after vowing never again to go into a Carphone Whorehouse. I was very pleased with the knowledge of the staff in that branch (Coventry), and the way they assessed my knowledge and treated me appropriately. I was looking forward to dealing with P4U, though a different branch, again in a month or so when my current contract runs out, but it looks as if it is not to be.

        The problem with EE/Voda/O2/etc shops is it makes it more difficult to compare deals. P4U made it easy to try phone/contract combos at the same time. It looks like the next phone will be from Tesco ...

  2. Vince

    The website was showing the message at least as early as 8am today. Do keep up el reg.

  3. Velv Silver badge

    I foresee a "fire sale" of cheap devices on he horizon. Could be some bargains to be had as the stock in the shops is sold off.

    1. James 51 Silver badge

      Depends if they had bought the handsets outright. If so they might try to return them for a refund or sell them on to a comerical buyer.

    2. Stretch

      they don't own shit.

    3. DrXym Silver badge

      "I foresee a "fire sale" of cheap devices on he horizon. Could be some bargains to be had as the stock in the shops is sold off."

      Except for any sim free phones they might carry the rest are probably on a sale or return basis.

  4. David Gosnell

    Locked phones

    What proportion of customers buy network-locked phones these days anyway? I'm sure it's still quite a few, but surely this is all part of the sea change towards people recognising contracts for what they are: frequently uncompetitive hire-purchase schemes in disguise, where the customer would be better off buying SIM-free if they (or their plastic) can afford it. I bought my last phone outright from Argos of all places - cheaper at the time than any of the CPW/P4U type places, and costing less in total than a lot of contracts charge for the up-front fee for certain high-profile devices before the bazillion pounds a month for 30 years kicks in.

    1. Paul Shirley

      Re: Locked phones

      This is much of the problem specialist mobile middlemen have: the supermarkets have taken too much of their market through lower prices, not pissing off the customers with hard sell and the certain knowledge that getting support will involve many less hours shouting at people.

      With most phones now 'good enough' even the (dubious) sales advice isn't adding more value than the annoyance listening to BS merchants causes.

      It seriously worrying that competition is now in the hands of supermarkets though, even if they're the only groups large enough to force carriers to the table.

    2. Lee D Silver badge

      Re: Locked phones

      Given the existence (and therefore presumably profitability) of at least 8 different betting shops in one street in my town, common sense does appear to be in short supply among the general populous.

      Owning a phone for "only" £30 a month is, thus, tempting to those people whether or not they are tied into a contract.

      Personally, I put off smartphone use until 2 years ago - my girlfriend had done the same and follows what I tell her to do, tech-wise at least. Then we bought a Galaxy Ace each because it was the cheapest phone that we could own outright. Over time we ditched Virgin contract (my girlfriend makes lots of foreign calls and it worked out well) for Virgin SIM-only (with a Tesco Calling Card for international call), for giff-gaff SIM-only (cheaper international calls than even the calling card).

      Just this month, we ditched the phones and moved to S4 mini's because - again - we could own those outright without having to worry about contracts and suppliers. It took about ten minutes to change onto the new phones and a day for our original numbers to come across onto a clean mini-SIM. The old phones will go to family in Italy who still haven't caught up with the smartphone era for precisely these reasons (and data packages over there are prohibitive).

      So technically - over 2 years - we're both on unlocked S4 mini's, with 4G-capable SIMs that have cheaper international calls than most international call providers, and we aren't on a binding contract but pay ~£10 a month for the connection (and basically zero over that except for her phone's international calls separately at literally pence per minute) and have two spare unlocked Galaxy Ace's for when foreigners come to stay that can run our sat-nav programs and speak Italian to them..

      Not everyone will go through that hassle, not everyone will know those paths exist, not everyone will be bothered to do that every year and evaluate their choices - especially when they can just walk into a shop, pay £35 and walk out with a top-end phone. The fact that over the initial year, on a contract, you could have bought my phone outright, have it be unlocked all the time, never get tied into a contract, get comparable voice / data packages, etc. is invisible to most people - and chances are they're in at least a 18 / 24 month contract.

      I had the same thing with my mum about twenty years ago. We stopped renting a TV from what was Radio Rentals. We did the maths and worked out that we could have had a new TV every year for ten years and still not paid the same amount of money. And we'd have had all the old TV's to sell / give away / use around the house.

      1. Friendly Neighbourhood Coder Dan

        Re: Locked phones

        My mum on Italy gets 2 GB for, I think, 8 Euros a month. If it's not that, it's not more than 10, plus a lot of minutes and texts. I think she's with TIM, but 3, wind and the post office mobile whatever all have competitive prices, in my opinion at least. Could it be that they get confused by the hundreds of deals available? I think one of the purposes of having so many is to intentionally confused people...

      2. Anonymous Coward
        Anonymous Coward

        Re: Locked phones @Lee D

        'Personally, I put off smartphone use until 2 years ago - my girlfriend had done the same and follows what I tell her to do, tech-wise at least.'

        Does what you tell her to do?

        You lucky bastard.

  5. IHateWearingATie

    Refreshing?

    This looks like a pretty refreshing approach - instead of muddling along trying to ignore the writing on the wall and then failing suddenly and spectacularly, they are pulling the plug early while there is still enough cash to pay the employees and creditors, and wind up the business in an orderly manner.

    1. Anonymous Coward
      Anonymous Coward

      Re: Refreshing?

      In part that's probably true, although don't forget they probably need to repay the bond holders for money borrowed only last year, otherwise they'll be hammered in the courts, and BC Partners (or whoever) will find it more difficult and expensive to borrow in future.

      The other reason for going home early is that without distribution contracts or an alternative and believable business model P4U won't be able to get trade credit insurance (insurance that guarantees that the owner of the goods gets paid back if the retailer can't pay its way) and in that case nobody will give them the handsets to sell.

      I'd guess there probably isn't much P4U owned stock to clear (after unsold handsets are returned to the networks who still own them), and the whole operation could be history in a few days. With CPW leaping out of the frying pan, and general over-capacity in mobile phone retailing I'd guess there's not really going to be much demand for many of the shops.

    2. Anonymous Coward
      Anonymous Coward

      Re: Refreshing?

      Doubt they had a real choice. They will have masses of their future money wrapped up in long term commitments to various parties so the sooner they get into administration the better.

      Most of their store contracts are probably long term leases that they would be forced to keep paying if they tried to remain trading. Now they can stop paying the rent and the contract will be effectively voided with the landlords scrabbling over the remains with all the other creditors.

      As long as they foresaw the impending 'doom' and managed to release any cash out to its shareholders there is probably little of serious value left in the company. I would doubt the staff are going to be paid wages for much longer as there is no longer for the administrators to keep them on while the business is not trading. The staff might be used for stock takes and tidying up for a couple of days while any market interest is garnered but based upon the lack of a market for an independent phone store they are likely to be released within the next few days, I would guess.

    3. Steve 114

      Re: Refreshing?

      And a fortnight before the quarter-day when rents are due is handy to get the shops cleaned out. If they hadn't fully stuffed the brand, someone could buy it from the Administrators, run a no-overhead 'comparison' website and take slim commissions off everyone. Wanna bet?

    4. The Godfather

      Re: Refreshing?

      A little premature to suggest this...let us wait until the the process is complete.

      I have no misgivings about someone building a great business and selling it on for mega-bucks. I do however take issue with that same guy crucifying carriers and those same private equity partners who coughed up the mega-bucks. The model of Phones4U was a spent force...had been for some time and I can bet you remaining players will be carefully watching their backs too.

      Once you sell your baby to private equity, who then sell it to new private equity etc etc, decline usually follows, more so when it's used to pay out quick fast bucks out of what's there.

  6. Jon Massey

    ...and not a single tear was shed. The slimiest scumbags in the business engaging in the worst of pressure sales tactics. Good riddance!

    1. Intractable Potsherd Silver badge

      As I wrote above - not my experience with P4U. Carphone Whorehouse take that award based on my interactions with them. Leaving without buying something requires shaking the staff off your legs!

  7. Anthony 13

    And the CEO and board didn't see it coming...

    ... double bonuses all 'round!

  8. Anonymous Coward
    Anonymous Coward

    This is the problem

    when you run something like P4U and all your suppliers branch into their own physical retail outlets. In a world of such small margins and tight competition it's madness to have a shop on the street selling your phones next to your competitors whilst you've got a branch 40m away.

    Also, P4U were shit anyway. I got to Asda for my phones. Lowest prices unlocked handset only I've ever seen.

  9. Tom 7 Silver badge

    BT were gloating on their web site saying they'd (P4u) called in the receivers.

    While I was trying to sort out what should have been a trivial problem...

  10. Anonymous Coward
    Anonymous Coward

    Only last night ..

    I predicted that in the coming years we are going to see the "high street" recreated inside the big hypermarkets of Tescos etc al.

    Rather than run their tech/banking/insurance/home brew (yes, Tescos do that too) themselves, they will provide the location, the buying power, and the footfall, and leave it up to the partner to make the money.

    Maybe P4U could get a jump on this, and offer to run Morrisons tech business ?

    1. Anonymous Coward
      Anonymous Coward

      Re: Only last night ..

      Having had a "dinner of desperation" the other night; a Morrisons alleged "four cheese sauce" over a form of tortellini that defied proper classification, I'd say P4U had all the necessary skills to take over Morrisons food production and development to boot. Whoever created the sauce and pasta was presumably taking some time out from a successful career in the chemical weapons industry, but wanted to keep their hand in. To make something taste that spectaularly bad you have to a) work very hard at it, b) hate literally everybody and c) have a detailed working knowledge of how various plastics actually taste.

      I know, I know, its profoundly slack to not take the extra 3 minutes to make a four cheese sauce myself, but the only defence I have is that it was in the fridge looking easy at 2 am, and I didn't buy it myself. Well, I learned.

      1. Steven Raith

        Re: Only last night ..

        In their defence, some of the larger stores do stock Riggwelter by Black Sheep, which is a lovely ale.

        But yeah, they have some odd ideas about food - their scotch pies are horrifically bland.

        ....What was that about a mobile phone supplier?

        Steven "knows his scotch pies" R

        1. Anonymous Coward
          Anonymous Coward

          Re: Only last night ..

          The same shopping deposited a scotch pie in the fridge too; yes, bland, but perhaps worse was the almost complete lack of fat in either the pastry or 'meat'. Its hardly a scotch pie really is it? And that was the 'deli counter' version. The pre-packed ones from somewhere east of Warsaw are beyond the pale; the pastry is closer to bread than pie crust. I'm amazed Scotland doesn't sue them.

          1. Anonymous Coward
            Anonymous Coward

            Re: Only last night ..

            WTF is a "scotch pie"??

            Scotch egg, yeah. But a scotch pie???

            And dont "LMGTFY". Can a true scottish commentard enlighten this sassenach?

            1. Robert Baker
              Joke

              Re: Only last night ..

              What a pity that food PC means that Scotch Eggs/Pies can no longer be made with real Scotch.

            2. Anonymous Coward
              Anonymous Coward

              Re: Only last night ..

              @ cornz 1

              You'll have seen their pale imitators in the supermarket, although probably not for much longer judging by the revolting interpretation of the recipe they give them.

              Its a round meat pie with a casing of (I think) water pastry, thin crust and usually crispy at the rim, soft at the bottom (that'll be the fat laddie), the lid is seperate and usually sits half an inch or so down from the rim, with a small circular hole in it as with pork pies. You can buy premade casings online. Filling is traditionally finely minced lamb (less prime bits of) and is generally pretty spicy, mainly peppery. The pastry looks unusual so it would stand out, and they're usually dusted with what I believe is semolina instead of flour.

              Wiki suggests they're also known as 'football pies', but as I'd rather spend a week in a sewage farm chewing broken glass than go to a football match, I don't know. They're common all over Scotland in bakers etc, and I don't doubt theres an annual cometition for the best, which I definitely would go to.

              I was brought up on these as part of the traditional Scottish 'suicide' diet, and although I've lived in the land of pale imitations since 12, I still get excited when I go back or find a decent one in London, along with bridies, tatty scones, white/fruit pudding (fried, natch), oatcakes, proper drop scones (OK, I make those) etc. I give thanks for my accident of birth every time my girlfriend replicates her craving for childhood food from Germany; Dithmarscher kluse and meilbottel (utterly wrong spelling the last one) served with home made fruit sauce. Hello? You're kidding surely??? Think basically wallpaper paste boiled, in the second case using a tea towel and string to suspend it in water. Life's just too short...

        2. John Brown (no body) Silver badge

          Re: Only last night ..

          "their scotch pies are horrifically bland."

          That seems to be government "guidance" on reducing fat,salt and sugar in processed foods. Much of it is tasteless now. Well,I say "now". I really mean more so than previously.

          1. Version 1.0 Silver badge

            Re: Only last night ..

            They have tasted terrible since they took the horse meat out.

  11. Scubadynamo

    This is a positive thing.

    Im glad about this. Phones4u are horrible. The way their staff hound you in the shopping center wont be missed. Cant think of anything else they do. No after sales support, whenever I have had a problem they wash their hands of it and tell you to contact the network operator.

    Good Riddance.

    1. Lamont Cranston

      Re: This is a positive thing.

      Much like CarphoneWarehouse, they were OK if you knew what you wanted

      Me: "Can I have [handset] on [contract]?"

      Them: "No, but you could look on our website."

      Never got any pressure off of the salespeople in either CarphoneWarehouse or Phones4U. Stark contrast to the greasy little shits in the network shops (with the exception of the nice boy in one of the O2 stores), who all seemed to want to a) get me to upgrade to 4G, or b) convince me that a crappy handset was a good reason to stay with their network.

      1. wolfetone Silver badge

        Re: This is a positive thing.

        Thing is I always used to champion Carphone Warehouse over Phones 4 U. I used to go in to P4U and just be looking at the handsets, curious if anything. But you'd ALWAYS have some slime ball shit bag come up to you and try and entice you in to sitting down looking for a contract. I remember the once about 6/7 years ago I went in looking for a £20 phone contract, they would only offer me £35 contract on a completely different phone and then tried to give me £75 to go ahead with the deal.

        However, while you must applaud CPW for their customer service selling phones, their technical/repair team are total idiots. I put my phone in nearly 3 months ago to be fixed, and I've been back twice to find out the fault wasn't fixed even though they said it was. Just a complete joke of a service really.

        The lack of competition is worrying really, especially so as what EE (and Vodafone) have effectively cut off supply to P4U to help their own shops. CPW will be next, but will be protected by Dixons really and eventually swallowed up by them completely.

        1. Anonymous Coward
          Anonymous Coward

          Re: This is a positive thing.

          "their technical/repair team are total idiots."

          Sadly, as i speak from bitter experience, the Nokia repiar team can also be as bad.

  12. jason 7 Silver badge

    This is good news...

    ....for BetFred, and all the other high street gambling chains as another shopping unit will be up for takeover soon.

    1. Anonymous Coward
      Anonymous Coward

      Re: This is good news...

      Or the up and comming betsid.com .....

    2. MyffyW Silver badge

      Re: This is good news...

      ...or an alternative home for "Fraley's Robot Repair".

      http://pghrobotrepair.com/

  13. Anonymous Coward
    Anonymous Coward

    The key point

    "We were told by the Phones4u management team that they had little commercial flexibility due to their debt repayment obligations"

    A very common problem for any company that finds itself taken under the wing of Private Equity - they're typically loaded up with as much debt as they can possibly finance when running flat out, so they have nowhere to go if any (when) any hiccup occurs, and hence they're doomed.

    1. Marcus Aurelius

      Re: The key point

      That would mean some enterprising chappie could buy the assets of phones4u, do a deal with Vodaphone/EE as they wouldn't have the debt albatross to prevent them, and go back into business...

      1. Tapeador

        Re: The key point

        I don't think it's got any assets, just liabilities. Its premises seem to have all been sold to a third party on leaseback arrangements in order to create a windfall for BC Partners.

  14. Oh Homer
    Windows

    "offered repeated opportunities to propose competitive ... terms"

    Translation: We bullied P4u to accept our extortionate prices, but they told us to fuck off.

    Which isn't really surprising, given that the supposedly poor market conditions didn't seem to stop Voda reaming over £60 billion in the last financial year.

    1. Tapeador

      Re: "offered repeated opportunities to propose competitive ... terms"

      Until you see the figures you don't know what it translates as. It could mean just what it says.

  15. Anonymous Coward
    WTF?

    Seems clear to me

    'we sought a response from Phones 4u, after EE questioned "the long term viability of the Phones 4u business".'

    Phones 4u revenue for 2013, £1.07 billion. EE pulls the rug out from under Phones 4u and then goes on to question "the long term viability of the Phones 4u business". How is a mobile phone reseller expected to stay in business without being able to offer its customers contracts with the telecom companies.

    I would like to congratulate Phones 4u on passing this 4G milestone. They have been a key partner in driving the uptake of 4G through demonstrating EE’s benefits to customers.

    Phones 4u are a strategic partner and complement our Direct Channel strategy for Sales and Service. We look forward to continued growth of 4G adoption in the UK as more and more customers make the most of EE’s award winning network.” Marc Allera, EE chief commercial officer Jan 2014

    1. Tapeador

      Re: Seems clear to me

      The question isn't the revenue, the question is what portion of the revenue they were willing or even able to give to EE, given P4U's very large liabilities it had to service..

    2. The Godfather
      WTF?

      Re: Seems clear to me

      Don't ever believe all that marketing bullshit and testimonials...

  16. J J Carter Silver badge

    With 20:20 hindsight, maybe they should have created their own virtual network operator, as per giffgaff, Virgin, Tesco and gone up the value chain.

    1. therebel

      Well they kind of did a few years ago. You could take out a contract on the Vodafone network but they would bill you themselves. It was called Singlepoint. After some time Vodafone bought that business from them and promptly dropped the name and started billing directly.

      Funny you mention 20:20 as I think that was the name of John Caudwell's phone distribution business.

      1. Anonymous Coward
        Anonymous Coward

        Singlepoint

        I had one of those contracts. After Vodafone took over I was locked in to a high monthly fee AND high cost per txt and per minute. I will never use Vodafone again

  17. Fihart

    Asset stripping business as usual.

    My understanding from the financial pages. P4U bought at distress price by private equity chaps who cut costs and flogged off assets just enough to attract bond buyers. Bond was used to pay pe chaps, leaving the business too weak to withstand debt burden, price cuts and inevitable drift of telcos towards direct sales. Each supplier pullout made P4U less viable. Bond holders and staff lose everything, customers lose choice, pe chaps lol.

    No different to the 1970s "unacceptable face of capitalism" or buy-to-let property predators of today.

    For what it's worth, my experiences of P4U and Craphone Whorehouse were no worse than telco shops -- in fact the latter was as helpful as local Voda.

    1. The Godfather

      Re: Asset stripping business as usual.

      Spot on assessment... happens all the time

  18. Anonymous Coward
    Anonymous Coward

    From a personal perspective I have always found CPW far less agressive and hard sell than P4U but that isn't saying much!!

    My last couple of phones have come via online channels as I am perfectly happy to wait a day or 2 to get my hands on my new kit.

    Tariff wise it doesnt help that the same company (EE I'm looking at you) has such a varied price structure among its brands

  19. Anonymous Coward
    Anonymous Coward

    Good Riddance To Bad Rubbish

    I bought my last phone from them. Galaxy S4. Which went faulty 3 times in less than a year (the first time in less than 6 months). Their Customer Service was a complete joke. They treat you like a criminal and call you a liar to your face and that they are doing you a favour doing what is required of them by law. And boy do they hate it when you point the law out to them. Each occasion the phone went wrong was just a pure joke. I then found out afterwards that O2 (who the contract is with) would have sent the phone away for repair and got it back to me all within less than a week compared to Phones4U 20 day minimum turn around. Dont believe about their customer service? Look over their Facebook page

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