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Phones 4u Ltd.
Company typePublic
IndustryTelecommunications
Founded1987 (as Midlands Mobile Sales)
1996 (as Phones 4u)
FounderJohn Caudwell and Brian Caudwell
DefunctSeptember 2014
FateEntered administration
Headquarters
Newcastle-under-Lyme
,
England
Key people
Tim Whiting (CEO)
Phil Dobson (Deputy CEO)
ProductsHome, mobile telephone equipment and services
OwnerBC Partners
Websitewww.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 expanded to over 600 stores. On 14 September 2014, EE, Vodafone, Orange & O2, the company's final remaining suppliers, ended their contracts.[1][2] The company entered administration (bankruptcy) 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.[citation needed] 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 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.[6]

On 15 September 2014, Phones 4u entered administration. Stores closed and both the Phones 4u and Dial-A-Phone websites were taken offline, 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 and rebrand 140 stores. 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 and rebrand 58 stores, while Dixons Carphone revealed that they would transfer 800 employees to its Currys and PC World stores.[10]

On 23 September 2014, administrators PwC announced that close to 1700 jobs would be lost.[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 entities:

  • 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 Three, 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 purchase value); rather than waiting for their device to be repaired or replaced.[citation needed]

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.[14] 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.[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 offering unfair terms on chequeback schemes. Phones 4u responded with a series of undertakings to prevent recurrences.[16] 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.[17] After six months of intense 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.[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]

Advertising and sponsorship

Phones 4u was noted for its effective[21] and controversial[22] advertising campaigns.

A shirt sponsorship deal was agreed with Birmingham City F.C. for two seasons beginning in 2001.[23]

In 2004, the comedy duo Flight of the Conchords featured in a television advert driving up and down Britain singing about the latest offers.[24]

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[clarification needed] 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, 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.[25]

In 2010, it launched the "It's What We Do" campaign. Television adverts showed Bangkok prison guards getting accustomed to a new handset.[26]

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".[27]

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 horror movies, featuring a young girl; with the other making a play on the classic zombie genre.[21] The former advertisement received the most complaints filed with the ASA for any advert in 2011,[22][28] however the complaints were rejected by the ASA who said "The programmes the advert was screened around were unlikely to be viewed by children."[22][29]

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 5-year sponsorship deal with the Manchester Arena, renaming the arena as the Phones 4u Arena.[30]

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

References

  1. ^ a b "Retailer Phones 4u 'Forced Into Administration'". News.sky.com. 15 September 2014. Retrieved 6 March 2015.
  2. ^ a b "Phones4U closure". Evernote.com. 14 September 2014. Retrieved 6 March 2015.
  3. ^ 15 September 2014 at 4:42pm (15 September 2014). "Staffordshire-based firm Phones4U goes into administration | Central - ITV News". Itv.com. Retrieved 10 February 2015.{{cite web}}: CS1 maint: numeric names: authors list (link)
  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. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  5. ^ "Dialaphone sold for 'knock down' £9m". Mobile Today.
  6. ^ Milmo, Dan (18 March 2011). "Phones 4u sold in private equity deal". The Guardian. London.
  7. ^ on 4/24/2012 9:50:52 AM (24 April 2012). "Three and Phones 4u part company". Mobile Today. Retrieved 10 February 2015.{{cite web}}: CS1 maint: numeric names: authors list (link)
  8. ^ Campelli, Matthew (31 January 2014). "O2 and Phones 4u ceases trading relationship". Mobile Today. Retrieved 10 February 2015.
  9. ^ "Vodafone takes on Phones 4U stores, but 628 HQ jobs to go". BBC News. 19 September 2014. Retrieved 19 September 2014.
  10. ^ "EE to take over 58 Phones 4U stores". BBC News. 22 September 2014. Retrieved 22 September 2014.
  11. ^ "Phones 4U - 1,700 jobs still to go despite EE, Vodafone and Dixons takeovers". HR Grapevine. 23 September 2014. Retrieved 27 October 2014.
  12. ^ "EE to complete Life Mobile purchase | Mobile News Online". Mobilenewscwp.co.uk. 14 October 2014. Retrieved 10 February 2015.
  13. ^ 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.
  14. ^ a b "Development First Training Ltd. - Phones 4u Case Study". Web.archive.org. 21 August 2011. Archived from the original on 21 August 2011. Retrieved 20 January 2016.
  15. ^ on 6/26/2008 11:04:00 AM (26 June 2008). "Phones 4u retrains 3,000 of its staff in next 80 days". Mobile Today. Retrieved 6 March 2015.{{cite web}}: CS1 maint: numeric names: authors list (link)
  16. ^ "Phones4U 'breached consumer laws'". BBC. 10 November 2008. Retrieved 25 November 2008.
  17. ^ Today, Mobile (20 November 2009). "Phones 4u blames complaints on the repairs process". Mobile Today. Retrieved 20 January 2016.
  18. ^ Juliette Garside. "Smartphones good and bad for Phones4u | Business". The Guardian. Retrieved 6 March 2015.
  19. ^ "The Scotsman". Archived from the original on 11 March 2007.
  20. ^ Garside, Juliette (16 November 2011). "Phones 4u hit by rise in smartphone claims". The Guardian. London. Retrieved 19 February 2012.
  21. ^ a b "Spooky Phones 4U ad takes People's Choice award". UTalkMarketing. 12 October 2011. Retrieved 20 January 2016.
  22. ^ a b c Sweney, Mark (21 December 2011). "Horror-themed Phones 4U advert cleared by regulator". The Guardian. London. Retrieved 21 February 2012.
  23. ^ "£3million Shirt Sponsorship Deal Announced - Birmingham City FC - Singing The Blues". Birminghamcity-mad.co.uk. Retrieved 6 March 2015.
  24. ^ "Flight of the Conchords - Phones 4u (better quality)". YouTube. 12 January 2009. Retrieved 6 March 2015.
  25. ^ "UK | Ad pulled after scouts complain". BBC News. 16 June 2009. Retrieved 6 March 2015.
  26. ^ Banham, Mark (17 May 2010). "Phones4u to launch Prison Guards campaign". Campaign. Retrieved 2 August 2013.
  27. ^ "Phones4U Jesus advert banned for 'mocking Christianity'". Metro. 7 September 2011. Retrieved 2 August 2013.
  28. ^ Andrew Laughlin (25 November 2011). "Littlewoods Christmas ad attracts more than 450 complaints". Digital Spy. Retrieved 21 February 2012.
  29. ^ "Phones4U's ghost advert complaints rejected by ASA". The BBC. 21 December 2011.
  30. ^ Ferguson, James (31 July 2013). "Manchester Arena signs deal with Phones 4u". Manchester Evening News. Retrieved 2 August 2013.
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