Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
UK mobile phone chain Phones 4U was placed into administration on 15 September 2014 resulting in the loss of between 1,697 and 3,550 jobs. Prior to going into administration, the company had 700 outlets (comprised of 560 stores and 160 concessions) across the UK. All of the 700 outlets were shut down on 15 September 2014, which has been reported as the largest one-day shut down of a UK chain since Woolworths collapsed in 2008.
As reported, the administrators, PwC were not able to find one buyer for the whole business and confirmed that 1,697 workers have been made redundant immediately. A further 720 workers have been retained by the administrators for the 'short term' as they work on the restructuring process. Once completed, these 720 workers will also be made redudant. Of the workers that have already been made redundant, 628 employees were reported as located in company’s head office in Newcastle-under-Lyme.
Three buyers have reached agreements with the administrators to buy parts of the chains. Dixons Carphone will buy 160 in-store concessions. This will see 800 workers who were working in mobile phone concessions located in PC World and Currys stores offered jobs by Dixons Carphone. Secondly, Vodafone UK will buy 140 outlets. This will save a further 887 jobs. Finally, EE has reached an agreement to buy 58 stores which will save 359 more jobs. The sale of these three parts of Phones 4U has saved 2,046 jobs to date. The total number of jobs that might be saved may yet increase further, as a number of mobile phone retailers are recruiting in the lead up to the Christmas trading period.
The company sold mobile-phone contracts and handsets on behalf of networks but its business model collapsed after several networks opened their own-branded outlets and as a result, did not renegotiate new contracts with Phones 4U. Owned by private equity firm BC, Phones 4U had more than £200 million in debts before being placed into administration.
Eurofound (2014), Phones 4U, Bankruptcy in United Kingdom, factsheet number 77567, European Restructuring Monitor. Dublin, https://dev.eurofound.europa.eu/restructuring-events/detail/77567.
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