|Headquarters||Newcastle-under-Lyme, United Kingdom|
|Key people||Tim Whiting
(4u Group and Phones 4u CEO)
(Deputy Group CEO)
|Products||Home and Mobile telephone equipment and services|
Phones 4u is a large independent mobile phone retailer in the United Kingdom. It is part of the 4u Group based in Newcastle-under-Lyme, Staffordshire. Since opening in 1996, it has expanded to over 600 stores throughout the UK.
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.
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. In February 2008, the group bought online retailer Dialaphone in a deal worth an estimated £9 million. In July 2010, Phones 4u partnered with electrical chain Dixons to place 49 concessions inside a small number of Currys and PC World stores. Since then this number increased to over a 100.
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 US private equity owner were aborted.
The 4u Group consists of the following brands:
- Phones 4u - high-street and online retailer
- LIFE Mobile - a mobile virtual network operator, running on EE
- Dialaphone - online retailer
- Policy Administration Services - mobile phone insurance provider
In-store and online, Phones 4u sell feature phones and smartphones from all major manufacturers on both contract agreements and pay as you go tariffs. These are available on all major UK network providers with the exception of 3, who Phones 4u stopped working with in April 2012.
Aside from handsets, Phones 4u stock mobile phone accessories and tablet computer devices. Innovative JUMP (Just Update My Phone) and 4u Wifi have been introduced to accompany the "mobile lifestyle" and support the core products.
Insurance is 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.
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. 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.
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. 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. Phones 4u have subsequently changed repair provider.
Turnover for the mobile phone retailer grew 22% in 2010, rising from £746m to £911m. The group employs over 8,000 people worldwide and sells 26 phones every minute. 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.
Advertising and sponsorship
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.
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 is 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 is 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.
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,".
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. The former advertisement received the most complaints filed with the ASA for any advert in 2011, however the complaints were rejected by the ASA who said "The programmes the advert was screened around were unlikely to be viewed by children.".
Phones 4u have backed its advertising campaigns with television programme sponsorships including Hollyoaks and Harry Hill's TV Burp. A shirt sponsorship deal was agreed with Birmingham City F.C. for two seasons beginning in 2001.
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