In one of the biggest events this year, Phones 4U collapsed into administration as a result of Vodafone, then EE deciding not to renew their contracts with the High Street fir. With no phones to sell, the firm had no choice but to call in PricewaterhouseCoopers (PwC) and head into administration. Now, the same firm that’s been put in charge of the firm’s finances has called in a leading law firm to ascertain whether or not the Directors of Phones 4U acted as they should running up to the collapse of the firm. While Phones 4U had £200 Million in cash, and were doing relatively well, before they headed into administration, the firm also owed £550 Million, which was more than likely a deciding factor in the firm’s fate.
Sky News is reporting that PwC have appointed legal firm, Quinn Emanuel Urquhart and Sullivan, to look into not only the actions of the Directors at P4U, but also how EE and Vodafone acted as well. With reports that Vodafone and Phones 4U were very close to a key deal just weeks before the firm collapsed, it’s no surprise that Vodafone and EE have been accused of profiting from the firm’s failures. Having said that, Vodafone was adamant that Phones 4U simply couldn’t commit to the sort of advertising and promotion required to make a deal due to the heavy debts the company was laden with.
While Currys and PC World, now merged with Carphone Warehouse under the Carphone Dixons group, kept many employees that worked in their stores as well as EE and Vodafone purchasing stores, the failure of Phone 4U has had an impact on the UK market. The three Phones 4U stores near me are still completely vacant, with the small town near me having no choice but to go to their local Tesco to purchase their mobiles at a fair price. With the Carphone Dixons Group and the networks focusing on their own stores it looks like there’s less competition than there used to be and with the market approaching stagnation, it’s difficult to say whether or not Phones 4U would have survived much longer, but the investigation should uncover more as time goes on.