But City slicker bosses set to walk away with millions
Vicious City sharks left 5,600 mobile phone reseller Phones 4U workers facing the dole yesterday in a pincer movement that will see its owners walk away with millions of pounds in cash.
Shell-shocked staff at 500 high-street stores turned up only to be told to go home as the firm entered administration.
Messages taped to shop windows informed the public that “following the unexpected decision of EE and Vodafone to withdraw supply from Phones 4U, we regret that this store is currently closed.”
As the lights went off, private equity owners BC Partners waged a war of words with the two mobile phone giants it blamed for the collapse.
But economic experts said that thousands of workers had “been screwed” by asset-stripping City financiers with nothing to lose from its closure.
BC Partners spokesman Stefano Quadrio Curzio said Vodafone’s decision to terminate a partnership with the firm this month, followed by EE last week, “appears to have been designed to inflict the maximum damage.”
But Vodafone said it had not been able to agree profitable enough terms with the firm.
“We were told by the Phones 4U management team that they had little commercial flexibility due to their debt repayment obligations,” it said in a statement.
BC Partners, whose empire includes estate agents Foxtons, bought Phones 4U for £700 million in a 2011 deal backed heavily by borrowing on the markets.
The owners have since sucked £700m in cash from the firm while leaving it saddled with £700m in debts.
The most recent raid on its finances saw BC Partners pocket £200m last September and pile it onto the company’s borrowing.
Economic expert Michael Burke said “the workers had been screwed by a combination of the monopoly phone providers plus financiers — people who are effectively asset-strippers.
“They load it up with debt and if it works, fine.
“If it doesn’t, they’ve got nothing to lose.”
Mr Burke warned that workers will continue to pay the price until the government clamps down on City financiers’ debt-backed takeovers.
“It’s really easy to shut down a company and walk away with the assets,” he said.
“It’s like the number 36 bus — they will keep coming unless you do something about it.”