Phones 4u

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Phones 4u Ltd.
Public
Industry Telecommunications
Fate Entered administration
Founded 1987 (as Midlands Mobile Sales)
1996 (as Phones 4u)
Founder John Caudwell and Brian Caudwell
Defunct September 2014
Headquarters Newcastle-under-Lyme, England
Key people
 Tim Whiting (CEO)
Phil Dobson (Deputy CEO)
Products Home, mobile telephone equipment and services
Owner BC Partners
Website www.phones4u.co.uk (Offline)

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. Since opening in 1996, it had expanded to over 600 stores throughout the United Kingdom. On 14 September 2014, after EE, Vodafone, Orange & O2, the company's final remaining suppliers, ended their contracts, it was announced that the company was to enter administration.[1][2] The company entered administration on 15 September 2014 with PricewaterhouseCoopers appointed as administrators.[3]

Company background

In 1987, John Caudwell and his brother Brian founded Midlands Mobile Phones, to wholesale distribute mobile phones. The company became the Caudwell Group, for which the 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 a small number of Currys and PC World stores.[citation needed] Since then this number increased to over 100. 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.
A closed branch on Oxford Street in London following the group's collapse.

The group was acquired by the 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 were aborted.[6]

On 14 September 2014, Phones 4u was put into administration following the decision by Vodafone and EE to not renew their contracts with the company. Stores closed and both the Phones 4u and Dial-A-Phone websites were taken offline on 15 September 2014, pending a decision by the administrators.[1][2] The other mobile networks already stopped trading through Phones 4u, with Three leaving in 2012[7] and O2 earlier in 2014.[8]

On 19 September 2014, Vodafone reached an agreement with the administrators of Phones 4u to take over 140 Phones 4u stores, and rebrand them. It was also revealed that 628 employees at the head office in Newcastle-Under-Lyme would be laid off.[9]

On 22 September 2014, EE reached an agreement with Phones 4u's administrators to take over 58 Phones 4u stores and rebrand them while Dixons Carphone revealed that they would hire 800 people who work in Phones 4u concessions at its Currys and PC World stores.[10]

On 23 September 2014, administrators PwC announced that close to 1700 jobs would still be lost in spite of the aforementioned takeovers.[11]

On 14 October 2014, EE announced that it would acquire Life Mobile from Phones 4u's administrators.[12][13]

The 4u Group consisted of the following brands:

  • Phones 4u Limited - high-street and online retailer
  • Life Mobile Limited - a mobile virtual network operator, running on EE
  • Dial-a-Phone - online retailer
  • Policy Administration Services - mobile phone insurance provider
  • 4u Wi-Fi Limited
  • Jump 4u Limited
  • MobileServ Limited
  • Phosphorus Acquisition Limited
  • Phones 4u Group Limited
  • Phones 4u Finance Plc

Products

Phones 4u operated both in-store and online and sold feature phones and smartphones from all major manufacturers on both contract agreements and pay as you go tariffs.[citation needed] Until September 2014, these were available on all major UK network providers with the exception of 3, who ceased working with Phones 4u in April 2012.[citation needed]

Aside from handsets, Phones 4u stocked mobile phone accessories and tablet computer devices.[citation needed] Innovative JUMP (Just Update My Phone) and 4u Wifi have been introduced to accompany the "mobile lifestyle" and support the core products.[citation needed]

Insurance was available on many of its products from the financial arm of the 4u Group, Policy Administration Services. In November 2012, Phones 4u changed their insurance policy from PremierPlan to Phones 4u Care, which offers customers an instant replacement in-store or similar alternative at the current handset value (not the value at time of purchase); rather than waiting for their device to be repaired or replaced.[citation needed]

Sales and service

Before 2008, there were complaints about shoppers feeling pressured by hard sell tactics for phone insurance, negative service perceptions and high staff turnover rates.[14] The retailer successfully retrained staff and moved away from some of its more aggressive practices, including street-fighting, the practice of sales people standing in shop doorways to lure in customers.[14][15]

In November 2008, Ofcom found Phones 4u guilty of misleading customers over network coverage, failing to swiftly provide refunds for faulty handsets and having unfair terms on chequeback schemes. Phones 4u have given Ofcom a series of undertakings to ensure that similar issues do not rise again.[16] The company said 80% of complaints were due to problems in its repair business, rather than mis-selling, which the company was in the process of resolving. After six months of intense scrutiny, the Ofcom investigation resulted in some minor changes to terms and conditions.[17] Phones 4u subsequently changed repair provider.[citation needed]

Turnover for the mobile phone retailer grew 22% in 2010, rising from £746m to £911m.[18] The group employed over 8,000 people worldwide and sold 26 phones every minute.[19] 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.[20]

On 1 September 2014, Vodafone announced that it would not renew its existing contract with Phones 4u.[21] In reply to Vodafone's statement, Phones 4u CEO David Kassler said "Although we are disappointed with the decision by Vodafone, Phones4u continues to trade well in the market".[22] EE soon followed suit, and Phones 4u entered administration on 14 September 2014.[23]

Advertising and sponsorship

Phones 4u was marked for its effective[24] and controversial[25] advertising campaigns.

A shirt sponsorship deal was agreed with Birmingham City F.C. for two seasons beginning in 2001.[26]

In 2004, the comedy duo Flight of the Conchords featured in a television advert driving up and down Britain singing about the latest offers.[27]

Phones 4u's 2006 campaign 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 for the first time, which would be revived for later campaigns.[citation needed]

In summer 2009, Phones 4u and communications agency Adam & Eve launched a new advertising campaign based around social networking and 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 was met with criticism from The Scout Association, and the advert was pulled.[28]

In 2010, it launched the "It's What We Do" campaign. Television adverts showed Bangkok prison guards getting accustomed to a new handset.[29]

In 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,".[30]

Later in 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 modern horror, featuring a young girl; with the other making a play on the classic zombie genre.[24] The former advertisement received the most complaints filed with the ASA for any advert in 2011,[25][31] however the complaints were rejected by the ASA who said "The programmes the advert was screened around were unlikely to be viewed by children.".[25][32]

Phones 4u have 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 5-year sponsorship deal with the Manchester Arena, renaming the arena as the Phones 4u Arena.[33]

In July 2014, it launched the "#FutureYou" campaign. Television adverts feature the DeLorean time machine famous for featuring in the Back to the Future films.[citation needed]

References

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External links

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  4. ↑ Caudwell Group Completes £1.5bn Sale To Private Equity Firms, Caudwell Press Release, 26 September 2006
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