Socialist Worker

Asset-stripping by bosses finished Phones4U

Issue No. 2421

How Phones4U failed

How Phones4U failed


More than 5,500 people in 550 workplaces across Britain could lose their jobs after sales company Phones4U went into administration.

Phones4U bosses have done everything they can to paint themselves as victims of duplicity by its ruthless suppliers. They are less keen to talk about their own role.

Former boss John Caudwell made £1.5 billion when he sold it to private equity sharks.

It is currently owned by BC Partners, which bought it with money it didn’t have then milked it dry to pay off debts.

This meant that Phones4U had little “commercial flexibility” as its massive profits went towards paying its creditors. This led to it losing out in the cutthroat competition between rival companies.

BC Partners still made a 30 percent profit out of the scam. But the staff who made their success possible have been kept in the dark then thrown to the wolves.

One shop worker told Socialist Worker, “I knew for about six months that things were coming to an end, but was told I was wrong.

“Upper management were chopping and cutting back staff levels to an unmanageable degree and expecting everyone to do more. They cut commissions massively last year, then again in July.

“The messages from the top were inconsistent and contradictory. They knew this was coming.”


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News
Tue 16 Sep 2014, 18:01 BST
Issue No. 2421
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