Phones 4u

Last updated

Phones 4u Ltd.
Company type Subsidiary
Industry Telecommunications
Founded1987 (as Midlands Mobile Sales)
1996 (as Phones 4u)
Founder John Caudwell and Brian Morrison
Defunct15 September 2014
FateEntered administration
Headquarters
Newcastle-under-Lyme
,
England
Key people
Tim Whiting (CEO)
Products Home, mobile telephone equipment and services
Owner BC Partners
Parent 4u Group
Divisions 4u Wi-Fi Limited
Jump 4u Limited
Phosphorus Acquisition Ltd
Phones 4u Group Limited
Subsidiaries Phones 4u Limited
Life Mobile Limited
Dial-a-Phone
MobileServ Limited
Phones 4u Finance Plc
The Discovery Store
Website phones4u.co.uk at the Wayback Machine (archived 2013-08-28)

Phones 4u was a large independent mobile phone retailer in the United Kingdom. It was part of the 4u Group based in Newcastle-under-Lyme, Staffordshire. Opening in 1996, it expanded to over 600 stores. On 14 September 2014, EE and Vodafone, the company's final remaining suppliers, ended their contracts. [1] [2]

Contents

The company entered administration on 15 September 2014 with PricewaterhouseCoopers appointed as administrators. [3]

History

In 1987, John Caudwell and his brother Brian founded Midlands Mobile Phones, a wholesaler and distributor of mobile phones. The company became the Caudwell Group, whose high street retail arm was named Phones 4u.[ citation needed ]

On 26 September 2006, The Caudwell Group was sold for a sum of £1.47 billion to private equity firms Providence Equity Partners and Doughty Hanson & Co. [4] In February 2008, the group bought online retailer Dialaphone in a deal worth an estimated £9 million. [5]

In July 2010, Phones 4u partnered with electrical chain Dixons to place 49 concessions inside Currys and PC World stores. [6] This number increased to over one hundred. However, following a merger between Dixons and rival phone shop, Carphone Warehouse, it was announced that this partnership would not be renewed.[ citation needed ]

A branch of Phones 4u on Briggate in Leeds. Phones 4 U, Briggate (11th April 2011).jpg
A branch of Phones 4u on Briggate in Leeds.

The group was acquired by private equity group BC Partners in March 2011. The deal, estimated to be worth in the region of £700 million, was agreed several months after talks with a United States private equity owner ended. [7] In April 2012, Phones 4u's contract with provider Three was terminated. [8] In January 2014, O2 ended their contract with Phones 4u. [9]

Adminstration

On 15 September 2014, Phones 4u entered administration, after the two remaining suppliers EE and Vodafone terminated their contracts. Stores closed, and both the Phones 4u and Dial-A-Phone websites were taken offline, pending a decision by the administrators. [1] [2]

On 19 September 2014, Vodafone reached an agreement with the administrators of Phones 4u to take over and rebrand 140 stores. It was also revealed that 628 employees at the head office in Newcastle-Under-Lyme would be made redundant. [10]

On 22 September 2014, EE reached an agreement with Phones 4u's administrators to take over and rebrand 58 stores, while Dixons Carphone revealed that they would transfer 800 employees to its Currys and PC World stores. [11]

On 23 September 2014, administrators PwC announced that close to 1,700 jobs would be lost. [12]

On 14 October 2014, EE announced that it would acquire mobile virtual network operator Life Mobile from Phones 4u's administrators. [13] [14]

Post-collapse litigation

In May 2022, a trial began in the High Court as a result of legal action brought by the administrators of Phones 4u, against various UK and foreign companies from the UK mobile telecoms sector. [15]

The lawsuit broadly alleged those companies engaged in unlawful collusion in breach of UK and EU antitrust law, resulting in the collapse of Phones 4u, and additionally alleged EE breached it's contract with Phones 4u. The lawsuit requested a remedy of compensatory damages from the defendants. [15]

In November 2023, the court handed down its judgement, finding for the defendants and dismissing all of Phones 4u's claims. [16]

Former corporate structure

The 4u Group consisted of the following entities:

Sales and service

Before 2008, complaints surfaced about shoppers feeling pressured by hard sell tactics for phone insurance, negative service perceptions and high staff turnover. [17] The retailer retrained staff and eliminated some of its more aggressive practices, including street-fighting, the practice of sales people standing in shop doorways to lure customers. [17] [18]

In November 2008, Ofcom found Phones 4u guilty of misleading customers over network coverage, failing to swiftly provide refunds for faulty handsets and offering unfair terms on chequeback schemes. Phones 4u responded with a series of undertakings to prevent recurrences. [19] The company said 80% of complaints were due to problems in its repair business, rather than sales, which the company was in the process of resolving. [20] [21]

After six months of scrutiny, the Ofcom investigation resulted in minor changes to terms and conditions. Phones 4u subsequently changed its repair provider.[ citation needed ]

Turnover for the mobile phone retailer grew 22% in 2010, rising from £746m to £911m. [22] The group employed over 8,000 people worldwide and sold 26 phones every minute. [23] In November 2011 it was reported that despite the company's turnover having increased, the rising cost of providing insurance with smartphones had contributed to a 25% loss of earnings. [24]

Advertising and sponsorship

Phones 4u was noted for its effective [25] and controversial [26] advertising campaigns.

A shirt sponsorship deal was agreed with Birmingham City F.C. for two seasons, beginning in August 2001. [27]

In 2004, the comedy duo Flight of the Conchords featured in a television advert driving up and down Britain singing about the latest offers. [28]

Phones 4u's campaign of 2006 starred a variety of eccentric characters, including "Jack" and "Scary Mary", who needed help with their mobile phones. The adverts were often set at the British seaside and featured the Phones 4u hand gesture[ clarification needed ] for the first time, which would be revived for later campaigns.[ citation needed ]

In the summer of 2009, Phones 4u and communications agency Adam & Eve launched a new advertising campaign based around social networking, popularity called "Great Deals for Popular People". The theme around the campaign was that the customer needs to have 50 contacts on their phone to get Phones 4u's best deals. In one of the ads, a scout master was displayed with the caption "You may be good with knots, you may be good with children, but there's no way you've got 50 friends on your phone", along with a large "NO" sticker. The campaign met criticism from The Scout Association, and the advert was pulled. [29]

In May 2010, it launched the "It's What We Do" campaign. Television adverts showed Bangkok prison guards getting accustomed to a new handset. [30]

In September 2011, the Advertising Standards Authority banned a Phones 4u advert depicting Buddy Christ alongside a range of Android phones with the message "Miraculous deals on Samsung Galaxy Android phones".

The ASA said "although the ads were intended to be light hearted and humorous, their depiction of Jesus winking and holding a thumbs up sign, with the text 'miraculous' deals during Easter, the Christian Holy Week which celebrated Christ's resurrection, gave the impression that they were mocking and belittling core Christian beliefs." [31]

Later in October 2011, Phones 4u switched its advertising focus to a broader demographic, spending £5.2m on a horror themed price led promotion called "Missing Our Deals Will Haunt You". The campaign included two television advertisements: one taking inspiration from horror movies, featuring a young girl; with the other making a play on the classic zombie genre. [25]

The former advertisement received the most complaints filed with the ASA for any advert in 2011, [26] [32] however the complaints were rejected by the ASA who said "The programmes the advert was screened around were unlikely to be viewed by children." [26] [33]

Phones 4u backed its advertising campaigns with television programme sponsorships, including Hollyoaks and Harry Hill's TV Burp .[ citation needed ] On 31 July 2013, it was announced that Phones 4u had secured a five year sponsorship deal with the Manchester Arena, renaming the arena as the Phones 4u Arena. [34] In July 2014, it launched the "#FutureYou" campaign. Television adverts featured the DeLorean time machine famous from the Back to the Future films. [35]

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References

  1. 1 2 "Retailer Phones 4u 'Forced Into Administration'". News.sky.com. 15 September 2014. Retrieved 6 March 2015.
  2. 1 2 "Phones4U closure". Evernote.com. 14 September 2014. Retrieved 6 March 2015.
  3. ↑ "Staffordshire-based firm Phones4U goes into administration". ITV News. 15 September 2014. Retrieved 10 February 2015.
  4. ↑ "CAUDWELL GROUP COMPLETES £1.5BN SALE TO PRIVATE EQUITY FIRMS" (PDF). Caudwell Group. 26 September 2006. Archived from the original (PDF) on 5 December 2006. Retrieved 20 January 2016.
  5. ↑ Today, Mobile (20 February 2008). "Dial-A-Phone sold for 'knocked-down' £9m". Mobile Today. Archived from the original on 22 August 2016. Retrieved 4 July 2017.
  6. ↑ "DSG to roll out Phones 4u shop-in-shops in Currys". Reuters. 26 July 2010. Archived from the original on 13 February 2020.
  7. ↑ Milmo, Dan (18 March 2011). "Phones 4u sold in private equity deal". The Guardian. London.
  8. ↑ Mobile Today (24 April 2012). "Three and Phones 4u part company". Mobile Today. Retrieved 10 February 2015.
  9. ↑ Campelli, Matthew (31 January 2014). "O2 and Phones 4u ceases trading relationship". Mobile Today. Retrieved 10 February 2015.
  10. ↑ "Vodafone takes on Phones 4U stores, but 628 HQ jobs to go". BBC News. 19 September 2014. Retrieved 19 September 2014.
  11. ↑ "EE to take over 58 Phones 4U stores". BBC News. 22 September 2014. Retrieved 22 September 2014.
  12. ↑ "Phones 4U - 1,700 jobs still to go despite EE, Vodafone and Dixons takeovers". HR Grapevine. 23 September 2014. Retrieved 27 October 2014.
  13. ↑ "EE to complete Life Mobile purchase | Mobile News Online". Mobilenewscwp.co.uk. 14 October 2014. Retrieved 10 February 2015.
  14. ↑ Ehrenberg, Billy (14 October 2014). "EE set to buy Phones 4U's mobile business for under £5m | City A.M". City A.M. Retrieved 10 February 2015.
  15. 1 2 Farmer, Brian (16 May 2022). "Phones 4u begins court fight with networks after going into administration". Evening Standard . Retrieved 1 October 2024.
  16. ↑ Speed, Richard (14 November 2023). "UK telcos didn't collude to put Phones 4u out of business – judge". The Register. Retrieved 1 October 2024.
  17. 1 2 "Development First Training Ltd. - Phones 4u Case Study". Wayback Machine. 21 August 2011. Archived from the original on 21 August 2011. Retrieved 20 January 2016.
  18. ↑ Mobile Today (26 June 2008). "Phones 4u retrains 3,000 of its staff in next 80 days". Mobile Today. Retrieved 6 March 2015.
  19. ↑ "Phones4U 'breached consumer laws'". BBC. 10 November 2008. Retrieved 25 November 2008.
  20. ↑ Today, Mobile (20 November 2009). "Phones 4u blames complaints on the repairs process". Mobile Today. Retrieved 20 January 2016.
  21. ↑ "Phone Repair Local Business Reviews". blobstreaming.org. Retrieved 3 July 2017.
  22. ↑ Juliette Garside (3 October 2011). "Smartphones good and bad for Phones4u | Business". The Guardian. Retrieved 6 March 2015.
  23. ↑ Bevens, Nick (7 August 2005). "Caudwell sells up for £1.46bn". The Scotsman. Wayback Machine. Archived from the original on 11 March 2007. Retrieved 4 July 2017.
  24. ↑ Garside, Juliette (16 November 2011). "Phones 4u hit by rise in smartphone claims". The Guardian. London. Retrieved 19 February 2012.
  25. 1 2 "Spooky Phones 4U ad takes People's Choice award". UTalkMarketing. 12 October 2011. Archived from the original on 12 April 2012. Retrieved 20 January 2016.
  26. 1 2 3 Sweney, Mark (21 December 2011). "Horror-themed Phones 4U advert cleared by regulator". The Guardian. London. Retrieved 21 February 2012.
  27. ↑ "£3million Shirt Sponsorship Deal Announced - Birmingham City FC - Singing The Blues". Birminghamcity-mad.co.uk. Retrieved 6 March 2015.
  28. ↑ "Flight of the Conchords - Phones 4u (better quality)". YouTube. 12 January 2009. Archived from the original on 19 December 2021. Retrieved 6 March 2015.
  29. ↑ "UK | Ad pulled after scouts complain". BBC News. 16 June 2009. Retrieved 6 March 2015.
  30. ↑ Banham, Mark (17 May 2010). "Phones4u to launch Prison Guards campaign". Campaign. Retrieved 2 August 2013.
  31. ↑ "Phones4U Jesus advert banned for 'mocking Christianity'". Metro. 7 September 2011. Retrieved 2 August 2013.
  32. ↑ Andrew Laughlin (25 November 2011). "Littlewoods Christmas ad attracts more than 450 complaints". Digital Spy. Retrieved 21 February 2012.
  33. ↑ "Phones4U's ghost advert complaints rejected by ASA". The BBC. 21 December 2011.
  34. ↑ Ferguson, James (31 July 2013). "Manchester Arena signs deal with Phones 4u". Manchester Evening News. Retrieved 2 August 2013.
  35. ↑ "Welcome to the #FutureYou - Phones 4u". YouTube. 17 July 2014. Archived from the original on 17 July 2014. Retrieved 15 May 2017.
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