Phones 4u 'Forced Into Administration'

wilt · 16-09-2014, 08:19

Quote:

The problem is, companies like EE are now thinking it will be cheaper to sell their own contracts.

Well it would be - not to mention there is less risk of the customer being churned if the shop they go into isn't actively trying to get them to switch networks.

With the margin squeeze in other areas due to new laws it's unsurprising networks are making moves like this. No sales will be lost with the demise of p4u - people still need phones.

A1 Comms up next I think - they only have Three and EE left. Though since they are online only they might be a bit more flexible on commisions to keep them on board. Bad for cashback though deals though - the days of barely paying for a contract are over, I think.

Mythica · 16-09-2014, 08:23

Quote:

Originally Posted by wilt

Well it would be - not to mention there is less risk of the customer being churned if the shop they go into isn't actively trying to get them to switch networks.

With the margin squeeze in other areas due to new laws it's unsurprising networks are making moves like this. No sales will be lost with the demise of p4u - people still need phones.

A1 Comms up next I think - they only have Three and EE left. Though since they are online only they might be a bit more flexible on commisions to keep them on board. Bad for cashback though deals though - the days of barely paying for a contract are over, I think.

I know, it was always going to happen.

jonmorris · 16-09-2014, 12:18

The way the subsidy system works, there's a risk if a company might not be, or not appear to be, in good shape.

When I sold phones, I started out with a huge credit so I'd but every phone at full price and then get the commission back when sold. Risky for me, if the kit wasn't sold and I had to pay, and risky for the supplier if I went bust.

I don't know how Phones4U did their accounting, but there will be a risk somewhere given the true value of all these phones. In fact, if the company was doing extra special deals to get more sales it could actually be even more risky and set alarm bells ringing.

And there are other factors too, like the quality of connections. Were they putting on good customers that paid promptly and didn't default etc?

All questions that will be asked in due course.

Futurama-Fan · 16-09-2014, 12:40

Quote:

Originally Posted by alanwarwic

So we have no rates, no services, no corporation tax, no local jobs and you disagree because 20% of our money goes to government, near zero is local.

Ghost towns, that is what we are going to get. Even our supposed service economy is heading offshore big time.

And EE, THree and Vodafone will be shrinking down to tokenism big city shops, just like BT, BG and other mega service companies.

Everything you said in the above quote is true. All I am saying is that adding an additional tax on 'internet sales' will have no effect on the death of the high street (and the loss of local jobs, local council taxes raised ect).

All an additional 'internet sales tax' would do is lose more jobs and tax revenue as the small and medium sized on-line retailers would need to charge the same, if not more, that the high street store. The big store and on-line retails will still be able to undercut everyone else (both high street retail and on-line).

So the consequence of an additonal tax on on-line sales would be to trap the 30% of the population not within easy reach of a large town or a city to go and buy 'locally on the high street'. Also the rest of the population would also lose out as the small retails (both on-line and on the high street) will be forced out of business. The end result of this will be that the big 4 or 5 companies in each sector/service will no longer be able to expand via buying smaller companies.

Due to this you will end up with a duopoly situation is almost all sectors as the companies will only be able to expand via mergers (when the stronger/larger company usually gets 60% or more of the new mergered entity and the junior/small partner gets 40% or less).

Therefore all an internet tax would do is reduce jobs in this country, reduce taxes raised (both at a national and a local level) and will end up with UK consumers paying far more (regardless of where they live in the country) as most sectors will end up with 2 dominant companies dictating price and contract terms and conditions.

The answer to the death of the high street retailer is for them to get themselves on-line. Yes this will still lead to the death of the high street, but will lead to more local jobs and more choice for the consumer.

The high street as we know it is dying - in some smaller towns the high street/town centre is already dead, and there is nothing that can be done.

There will always be high streets/town centres but the future is that half the retail space will be empty and those stores that will remain will be food store, fast food/cafes, pubs, coffee shops, betting shops, payday lenders, small newsagents and discount retails (Home Bargains, Poundland ect).

I agree with you that it is a shame that the local/independent high street is dying and that all that will be left is the above list of 'stores', but we have to be realistic and admit that there are not enough people like us that are happy to travel into a high street store. And this is why I disagree with the idea of an internet sales tax, due to the above consequences of this tax.

Although I am curious. If you had the power to enact an internet sales tax then what percentage rate would you charge. Also would you include this tax on all other non retail sales (mail order catalogues, internet betting sites ect).

binary · 16-09-2014, 15:08

Interesting segment on this morning's BBC Radio 4 Today programme featuring Phones 4U founder John Caudwell and former OFT chief executive John Fingleton in discussion.

Listen here (8mins 30s duration)

sethpet · 19-09-2014, 18:08

Vodafone have snapped up 140 of the phones 4u shops and vowed to retain the 900 staff.

http://www.mobiletoday.co.uk/news/in...4u-stores.aspx

clonmult · 19-09-2014, 19:03

Quote:

Originally Posted by sethpet

Vodafone have snapped up 140 of the phones 4u shops and vowed to retain the 900 staff.

http://www.mobiletoday.co.uk/news/in...4u-stores.aspx

I do wonder how this is going to work - whilst there will be some P4U stores with no immediate Vodafone Store neighbour, I would hazard a guess that the majority are within a stones throw.

EE haven't been able to maintain both the old T-Mobile and Orange stores nearby, so how are Vodafone going to handle this? They're only going to be able to sell phones on Voda ...

johnathome · 19-09-2014, 19:27

Quote:

Originally Posted by clonmult

I do wonder how this is going to work - whilst there will be some P4U stores with no immediate Vodafone Store neighbour, I would hazard a guess that the majority are within a stones throw.

EE haven't been able to maintain both the old T-Mobile and Orange stores nearby, so how are Vodafone going to handle this? They're only going to be able to sell phones on Voda ...

Well unless VF are stupid i'd imagine they don't have any stores near the 140 that they're buying?

sethpet · 19-09-2014, 19:34

I'd guess they have gone for two types of store.

Those that are in towns with no Vodafone shop

And those that are in a better location than a Vodafone shop in the same town. In this case is expect to see the Vodafone store to close in future

anyonefortennis · 19-09-2014, 20:39

EE said they will honour any Phones4U iPhone 6 and 6 Plus pre orders taken on contract with them through Phones4U and fast track your order to the top of the queue if you have a Phones4u order number.

maverickjesus · 19-09-2014, 22:31

Considering the extremely distressed price Vodafone will be paying for the stores, even if there are a few that are close to their existing stores, its probably worth buying them up anyway just to stop another network buying them.

Richard_T · 21-09-2014, 12:55

The issue here is that P4U are placing the blame on the network opperators, however P4U havent exactly had the best repuation over the years, while customer service may have improved slightly in recent years its always been associated with pushy salesmen.

Not only that but the high streets are saturated with phone shops from all the major operators something would have to give at some point as the operators will ( rightly ) want to take their contracted sales in house.
Combined with the debt loading by its investment bank owners the whole house of cards was bound to come crashing down eventualy.
The only real opportunity for their party sales would be for quality accessories not the tat thats largely sold by mobile unlock shops, repairs and sim free phones.
Also unless i havent noticed there deosnt appear to be any one selling a handset on hire purchase such as pay £X a month for the handset+ insurance and sort your own airtime/ sim only deal out

Zee_Bukhari · 21-09-2014, 13:10

my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store.

Richard_T · 21-09-2014, 13:20

Quote:

Originally Posted by Zee_Bukhari

my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store.

And do what with it? just how many phone shops does a high street/area need?

daclick · 21-09-2014, 13:32

Well Nottingham has phone shops round every corner

japaul · 21-09-2014, 17:00

As well as Vodafone buying 140 stores, EE are also looking at picking up around 60 stores according to this.

http://news.sky.com/story/1339367/ca...nes-4u-carcass

Earlier in the year, Vodafone said they would be adding around 150 extra stores as part of Project Spring. Given this and the previous stories about a Vodafone/EE joint bid for P4U you have to wonder if a factor in their decisions to stop supplying P4U was that it might allow them to both get what they wanted for less money.

clonmult · 22-09-2014, 08:17

Quote:

Originally Posted by Zee_Bukhari

my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store.

Very unlikely, unless the store is larger or in a much better location than the existing EE or Vodafone store. And remember that EE are in the process of de-duplication of their existing stores where they had a T-Mob and Orange store near to each other.

BigDaveX · 22-09-2014, 11:23

Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees.

clonmult · 22-09-2014, 11:38

Quote:

Originally Posted by BigDaveX

Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees.

Vodafone and EE are very strong on their branding - they have a very specific corporate image, and any stores bought will likely be totally gutted (Vodafone are in the process of doing that around the country) and rebuilt according to their corporate guidelines.

So everything will be thrown out and rebuilt from scratch.

jonmorris · 22-09-2014, 14:17

Seems a lot of the staff won't be thrown out though. Although they may have to re-apply for their job/position.

clonmult · 22-09-2014, 15:28

Quote:

Originally Posted by jonmorris

Seems a lot of the staff won't be thrown out though. Although they may have to re-apply for their job/position.

That is sadly quite normal in such acquisitions ....

The Lord Lucan · 22-09-2014, 15:53

Quote:

Originally Posted by clonmult

That is sadly quite normal in such acquisitions ....

Having managed a P4U store in a previous life.. this isn't a bad thing.

johnathome · 22-09-2014, 15:55

Quote:

Originally Posted by clonmult

That is sadly quite normal in such acquisitions ....

Doesn't TUPE come into effect or does administration negate the rules?

The Lord Lucan · 22-09-2014, 15:56

Quote:

Originally Posted by BigDaveX

Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees.

They pulled out as they didn't want to negotiate, they lied and messed the networks about. Lets not talk about the added customer services headache P4U seemed to have caused networks...

johnathome · 22-09-2014, 15:58

Quote:

Originally Posted by The Lord Lucan

They pulled out as they didn't want to negotiate, they lied and messed the networks about. Lets not talk about the added customer services headache P4U seemed to caused networks...

I read today that P4U got about £150 for every person they signed up to a network contract.
The sticking point was P4U wanted all the money upfront and the networks wanted to drip-feed the money over the length of the contract, which seems fair to me.

16-09-2014, 08:19	#76
wilt Forum Member Join Date: Oct 2004 Location: Potterspury Posts: 930	Quote: Originally Posted by Mythica The problem is, companies like EE are now thinking it will be cheaper to sell their own contracts. Well it would be - not to mention there is less risk of the customer being churned if the shop they go into isn't actively trying to get them to switch networks. With the margin squeeze in other areas due to new laws it's unsurprising networks are making moves like this. No sales will be lost with the demise of p4u - people still need phones. A1 Comms up next I think - they only have Three and EE left. Though since they are online only they might be a bit more flexible on commisions to keep them on board. Bad for cashback though deals though - the days of barely paying for a contract are over, I think.

16-09-2014, 08:23	#77
Mythica Forum Member Join Date: Jan 2012 Posts: 2,697	Quote: Originally Posted by wilt Well it would be - not to mention there is less risk of the customer being churned if the shop they go into isn't actively trying to get them to switch networks. With the margin squeeze in other areas due to new laws it's unsurprising networks are making moves like this. No sales will be lost with the demise of p4u - people still need phones. A1 Comms up next I think - they only have Three and EE left. Though since they are online only they might be a bit more flexible on commisions to keep them on board. Bad for cashback though deals though - the days of barely paying for a contract are over, I think. I know, it was always going to happen.

16-09-2014, 12:18	#78
jonmorris Forum Member Join Date: Jul 2002 Location: a land filled with trolls Posts: 12,018	The way the subsidy system works, there's a risk if a company might not be, or not appear to be, in good shape. When I sold phones, I started out with a huge credit so I'd but every phone at full price and then get the commission back when sold. Risky for me, if the kit wasn't sold and I had to pay, and risky for the supplier if I went bust. I don't know how Phones4U did their accounting, but there will be a risk somewhere given the true value of all these phones. In fact, if the company was doing extra special deals to get more sales it could actually be even more risky and set alarm bells ringing. And there are other factors too, like the quality of connections. Were they putting on good customers that paid promptly and didn't default etc? All questions that will be asked in due course.

16-09-2014, 12:40	#79
Futurama-Fan Forum Member Join Date: Mar 2012 Posts: 629	Quote: Originally Posted by alanwarwic So we have no rates, no services, no corporation tax, no local jobs and you disagree because 20% of our money goes to government, near zero is local. Ghost towns, that is what we are going to get. Even our supposed service economy is heading offshore big time. And EE, THree and Vodafone will be shrinking down to tokenism big city shops, just like BT, BG and other mega service companies. Everything you said in the above quote is true. All I am saying is that adding an additional tax on 'internet sales' will have no effect on the death of the high street (and the loss of local jobs, local council taxes raised ect). All an additional 'internet sales tax' would do is lose more jobs and tax revenue as the small and medium sized on-line retailers would need to charge the same, if not more, that the high street store. The big store and on-line retails will still be able to undercut everyone else (both high street retail and on-line). So the consequence of an additonal tax on on-line sales would be to trap the 30% of the population not within easy reach of a large town or a city to go and buy 'locally on the high street'. Also the rest of the population would also lose out as the small retails (both on-line and on the high street) will be forced out of business. The end result of this will be that the big 4 or 5 companies in each sector/service will no longer be able to expand via buying smaller companies. Due to this you will end up with a duopoly situation is almost all sectors as the companies will only be able to expand via mergers (when the stronger/larger company usually gets 60% or more of the new mergered entity and the junior/small partner gets 40% or less). Therefore all an internet tax would do is reduce jobs in this country, reduce taxes raised (both at a national and a local level) and will end up with UK consumers paying far more (regardless of where they live in the country) as most sectors will end up with 2 dominant companies dictating price and contract terms and conditions. The answer to the death of the high street retailer is for them to get themselves on-line. Yes this will still lead to the death of the high street, but will lead to more local jobs and more choice for the consumer. The high street as we know it is dying - in some smaller towns the high street/town centre is already dead, and there is nothing that can be done. There will always be high streets/town centres but the future is that half the retail space will be empty and those stores that will remain will be food store, fast food/cafes, pubs, coffee shops, betting shops, payday lenders, small newsagents and discount retails (Home Bargains, Poundland ect). I agree with you that it is a shame that the local/independent high street is dying and that all that will be left is the above list of 'stores', but we have to be realistic and admit that there are not enough people like us that are happy to travel into a high street store. And this is why I disagree with the idea of an internet sales tax, due to the above consequences of this tax. Although I am curious. If you had the power to enact an internet sales tax then what percentage rate would you charge. Also would you include this tax on all other non retail sales (mail order catalogues, internet betting sites ect).

16-09-2014, 15:08	#80
binary Forum Member Join Date: Jan 2002 Posts: 636	Interesting segment on this morning's BBC Radio 4 Today programme featuring Phones 4U founder John Caudwell and former OFT chief executive John Fingleton in discussion. Listen here (8mins 30s duration)

19-09-2014, 18:08	#81
sethpet Forum Member Join Date: Aug 2013 Posts: 494	Vodafone have snapped up 140 of the phones 4u shops and vowed to retain the 900 staff. http://www.mobiletoday.co.uk/news/in...4u-stores.aspx

19-09-2014, 19:03	#82
clonmult Forum Member Join Date: Oct 2005 Location: UK Posts: 3,291	Quote: Originally Posted by sethpet Vodafone have snapped up 140 of the phones 4u shops and vowed to retain the 900 staff. http://www.mobiletoday.co.uk/news/in...4u-stores.aspx I do wonder how this is going to work - whilst there will be some P4U stores with no immediate Vodafone Store neighbour, I would hazard a guess that the majority are within a stones throw. EE haven't been able to maintain both the old T-Mobile and Orange stores nearby, so how are Vodafone going to handle this? They're only going to be able to sell phones on Voda ...

19-09-2014, 19:27	#83
johnathome Forum Member Join Date: Oct 2002 Location: Pompey Posts: 1,068	Quote: Originally Posted by clonmult I do wonder how this is going to work - whilst there will be some P4U stores with no immediate Vodafone Store neighbour, I would hazard a guess that the majority are within a stones throw. EE haven't been able to maintain both the old T-Mobile and Orange stores nearby, so how are Vodafone going to handle this? They're only going to be able to sell phones on Voda ... Well unless VF are stupid i'd imagine they don't have any stores near the 140 that they're buying?

19-09-2014, 19:34	#84
sethpet Forum Member Join Date: Aug 2013 Posts: 494	I'd guess they have gone for two types of store. Those that are in towns with no Vodafone shop And those that are in a better location than a Vodafone shop in the same town. In this case is expect to see the Vodafone store to close in future

19-09-2014, 20:39	#85
anyonefortennis Forum Member Join Date: Sep 2011 Location: 🇬🇧 Posts: 60,865	EE said they will honour any Phones4U iPhone 6 and 6 Plus pre orders taken on contract with them through Phones4U and fast track your order to the top of the queue if you have a Phones4u order number.

19-09-2014, 22:31	#86
maverickjesus Forum Member Join Date: Aug 2013 Posts: 100	Considering the extremely distressed price Vodafone will be paying for the stores, even if there are a few that are close to their existing stores, its probably worth buying them up anyway just to stop another network buying them.

21-09-2014, 12:55	#87
Richard_T Forum Member Join Date: Dec 2002 Location: East Midlands Posts: 3,842	The issue here is that P4U are placing the blame on the network opperators, however P4U havent exactly had the best repuation over the years, while customer service may have improved slightly in recent years its always been associated with pushy salesmen. Not only that but the high streets are saturated with phone shops from all the major operators something would have to give at some point as the operators will ( rightly ) want to take their contracted sales in house. Combined with the debt loading by its investment bank owners the whole house of cards was bound to come crashing down eventualy. The only real opportunity for their party sales would be for quality accessories not the tat thats largely sold by mobile unlock shops, repairs and sim free phones. Also unless i havent noticed there deosnt appear to be any one selling a handset on hire purchase such as pay £X a month for the handset+ insurance and sort your own airtime/ sim only deal out

21-09-2014, 13:10	#88
Zee_Bukhari Forum Member Join Date: Apr 2013 Posts: 1,319	my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store.

21-09-2014, 13:20	#89
Richard_T Forum Member Join Date: Dec 2002 Location: East Midlands Posts: 3,842	Quote: Originally Posted by Zee_Bukhari my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store. And do what with it? just how many phone shops does a high street/area need?

21-09-2014, 13:32	#90
daclick Forum Member Join Date: Aug 2005 Posts: 3,336	Well Nottingham has phone shops round every corner

21-09-2014, 17:00	#91
japaul Forum Member Join Date: Apr 2013 Posts: 1,662	As well as Vodafone buying 140 stores, EE are also looking at picking up around 60 stores according to this. http://news.sky.com/story/1339367/ca...nes-4u-carcass Earlier in the year, Vodafone said they would be adding around 150 extra stores as part of Project Spring. Given this and the previous stories about a Vodafone/EE joint bid for P4U you have to wonder if a factor in their decisions to stop supplying P4U was that it might allow them to both get what they wanted for less money.

22-09-2014, 08:17	#92
clonmult Forum Member Join Date: Oct 2005 Location: UK Posts: 3,291	Quote: Originally Posted by Zee_Bukhari my area has phone shops from all the networks and CFW. maybe they will snap up this Phones 4 U store. Very unlikely, unless the store is larger or in a much better location than the existing EE or Vodafone store. And remember that EE are in the process of de-duplication of their existing stores where they had a T-Mob and Orange store near to each other.

22-09-2014, 11:23	#93
BigDaveX Forum Member Join Date: May 2012 Posts: 752	Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees.

22-09-2014, 11:38	#94
clonmult Forum Member Join Date: Oct 2005 Location: UK Posts: 3,291	Quote: Originally Posted by BigDaveX Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees. Vodafone and EE are very strong on their branding - they have a very specific corporate image, and any stores bought will likely be totally gutted (Vodafone are in the process of doing that around the country) and rebuilt according to their corporate guidelines. So everything will be thrown out and rebuilt from scratch.

22-09-2014, 14:17	#95
jonmorris Forum Member Join Date: Jul 2002 Location: a land filled with trolls Posts: 12,018	Seems a lot of the staff won't be thrown out though. Although they may have to re-apply for their job/position.

22-09-2014, 15:28	#96
clonmult Forum Member Join Date: Oct 2005 Location: UK Posts: 3,291	Quote: Originally Posted by jonmorris Seems a lot of the staff won't be thrown out though. Although they may have to re-apply for their job/position. That is sadly quite normal in such acquisitions ....

DS Forums

Phones 4u 'Forced Into Administration'

22-09-2014, 15:53	#97
The Lord Lucan Forum Member Join Date: Apr 2005 Location: Scotland Posts: 4,966	Quote: Originally Posted by clonmult That is sadly quite normal in such acquisitions .... Having managed a P4U store in a previous life.. this isn't a bad thing.

22-09-2014, 15:55	#98
johnathome Forum Member Join Date: Oct 2002 Location: Pompey Posts: 1,068	Quote: Originally Posted by clonmult That is sadly quite normal in such acquisitions .... Doesn't TUPE come into effect or does administration negate the rules?

22-09-2014, 15:56	#99
The Lord Lucan Forum Member Join Date: Apr 2005 Location: Scotland Posts: 4,966	Quote: Originally Posted by BigDaveX Makes me wonder if this was what the networks were planning all along; they wanted to set up more stores, but didn't want to spend the money kitting out the retail units from scratch and training new employees, and so decided to just put Phones4U out of business and snap up their stores and employees. They pulled out as they didn't want to negotiate, they lied and messed the networks about. Lets not talk about the added customer services headache P4U seemed to have caused networks...

22-09-2014, 15:58	#100
johnathome Forum Member Join Date: Oct 2002 Location: Pompey Posts: 1,068	Quote: Originally Posted by The Lord Lucan They pulled out as they didn't want to negotiate, they lied and messed the networks about. Lets not talk about the added customer services headache P4U seemed to caused networks... I read today that P4U got about £150 for every person they signed up to a network contract. The sticking point was P4U wanted all the money upfront and the networks wanted to drip-feed the money over the length of the contract, which seems fair to me.