The writing is (was?) on the wall for Phones 4U
The FT is reporting that it’s more or less game over for Phones 4U:
Phones 4U, the British retailer founded by entrepreneur John Caudwell that has spent most of last decade in private equity hands, has gone into administration.
The company, which is owned by London buyout house BC Partners and employs 5,596 people, said on Sunday that it had been forced to seek protection from its creditors after two of the UK’s largest mobile phone operators decided to withdraw their products from its stores next year.
Irrespective of whether you agreed with the company’s new owners taking a whopping special dividend last year, the writing was on the wall for Phones 4U.
It was on the wall ever since the founder sold up.
With the mobile operators focusing heavily on their sales and marketing efforts in a hugely competitive, saturated business, that last thing they need is for Carphone Warehouse and Phones 4U to exist.
Fundamentally, if you walk into any of these stores, they’ll do their level best to churn you from your existing network.
Because that’s where the revenue is.
I recognise that’s a semi-unfair statement, because these companies do (or did, in the Phones 4U case) play a part in helping consumers check out the rest of the market.
However this is absolutely not in the interests of any mobile network. And when it comes to having to fork out huge commission fees to Phones 4U and Carphone… well, yes… the writing has been on the wall.
Phones 4U heading into administration doesn’t mean it’s all over. Yet. There are lots of possibilities.
However I wonder how things are going to pan out for Carphone Warehouse?
Interesting times.
