Posts Tagged ‘Phones4U’

Vulture capitalists rip the heart out of British companies

November 9, 2014
Phones4u closed

Phones4u closed

Vulture capitalists borrow huge sums of money, use the money to buy up companies, load the debt on the company, then take everything they can out of the company, leaving behind a broken shell.

The pubcos are zombie companies. Laden with debt, barely able to service the debt, and only then by screwing pub landlords and selling off for property development, those pubs that are forced out of business.

Such is the scale, we could be facing another banking crisis as they bring down the banks.

Phones4u

Bought with borrowed money, the company then loaded with the debt.

Borrowed yet more money, the money used to pay a dividend, the company loaded with more debt.

The company then went under, pushed over by the mobile phone networks.

The company was caught between a rock and a hard place, caught between being screwed by the phone companies who wanted a better deal and having no room to manoeuvre with a debt to service.

The tax payer has to pick up the cost of redundancies, which were rushed through by the liquidator.

Whether Phones4u would have survived, is a moot point, probably not. With the phone companies having shops in every High Street, every shopping centre, what function was performed by Phones4u? They should have moved to the sale of unlocked handsets.

Comet

Comet was sold for two pounds, plus a sweetener of a tens of millions of pounds.

The new owners then stripped the company.

When the finance director woke up to what was going on and alerted his Member of Parliament, it was too late, the money had already been transferred to an offshore account on the Cayman islands.

Whether Comet would have survived, is a moot point, probably not. It had put little electrical shops out of business on price. Now it was being undercut by Amazon. What had they to offer? People only shopped at Comet because they were cheap. No one went to Comet to seek expert advice.

Phones4u goes into administration

September 15, 2014
Phones4u closed

Phones4u closed

If the mobile network operators decline to supply us, we do not have a business. — Phones4u chief executive David Kassler

Yet another shop closes in Aldershot.

For once, Aldershot not to blame, this is a case of yet another High Street chain closes.

Few will miss Phones4u, it is another mobile phone shop gone from our High Streets, another ghastly chain that drains money out of our town centres gone.

Phones4u will be no more missed than was HMV or Jessops.

Will WHSmith be next? A prime example of a failing High Street chain.

I have never used Phones4u, but from comments posted, it would seem few will miss, a bad employer with zero-hours contracts, poor service, shady practices like forcing insurance onto customers when covered by warranty.

Phones4u blame ee and Vodafone pulling the plug.

Dodgy insurance scam, investigation by FCA and massive payouts may also be an issue.

And that owned by Vulture Capitalists.

Phones4u was never going to be viable, when all it did was sell contracts for the networks, networks that have their own shops.

The only location a Phone4u store would be viable, would be where there would not be a customer base to support an exclusive network shop, but sufficient for all networks in one shop. But when we see mobile phone shops dominating the High Street, Phones4u must be surplus to requirements, as it is costly duplication.

This now raises a big question mark against Carphone Warehouse, as their businesses model is the same as Phones4u, selling phone contracts for the mobile phone networks.

The merger of Carphone Warehouse with Dixons never made sense, on the other hand, if they were no longer going to have anything to sell, then yes, it made sense, leaving Dixons with a worthless retail chain.

If and it is a big if, Phones4u would be viable were they to sell unlocked phones (deal direct with phone companies and bring in cheap smartphones from China) and supply sim cards.

Unlocked phones worth considering

  • Moto G
  • Fair Phone
  • Google Nexus 5

Recommended tablet

  • Google Nexus 7

Contracts were always a massive rip-off, that is why the companies were so keen to push them, as a lot of money to be made. Users are nearly always better off buying an unlocked phone and a pay as you go sim from Lebara or Lycamobile.

Note: LycaMobile a tax-dodger and major Tory Party donor.


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