Hundreds of Phones4u's stores empty a year after collapse

Smashed Phone

More than half of Phones4u’s former stores remain empty just over a year after the mobile phone retailer went bust.

Nearly 270 of the chain’s 554 stores remain empty, with outlets in Yorkshire, Wales and the east of England worst affected.

Matthew Hopkinson, director of The Local Data Company, which monitors shop vacancies around the UK, said the difficulty in filling Phones4u stores was not a surprise as many of the outlets were in unattractive locations that have suffered as consumers keep a tight rein on spending in the wake of the recession.

“The message in these numbers is that, while national vacancy rates have slowly improved, the reality exists that this country has too many shops for the 21st century,” he said.

The vast majority of Phones4u stores that have been reoccupied have been taken by other phone retailers – Vodafone, EE and Phone Clinic – but Hopkinson said demand was limited as the number of network operators had decreased and shoppers were increasingly turning to the internet.

“Unless there is a fundamental change in macroeconomic factors, an increase in the population, spend or employment then we don’t need these shops,” Hopkinson said.

The Phones4u story highlights the difficulty in reinventing high streets, as an increasing amount of sales go online and to out-of-town retail parks or shopping centres. The former mobile phone chain’s stores were mostly small – less than 140 sq metres (1,500 sq ft) – and so are not attractive to many retailers.

Cafes and sandwich shops, which are taking over premises on many high streets as Brits spend more on eating out, have difficulty taking up former Phones4u stores because they need special permission to change their use.

Difficulties in offloading the remaining leases is partly to blame for delays in finalising the administration of Phones4u, which went down owing £168m to unsecured creditors.

The main loser was the government, which lost out on VAT and corporation tax due to HMRC, as only £670,000 of Phones4u’s debts will be paid.

Phones4u, which made entrepreneur John Caudwell a multimillionaire, went into administration in September last year, affecting 5,596 jobs, after mobile network EE decided to stop selling through.

The network’s exit was the final nail in the coffin for Phones4u after its biggest rivals, Vodafone and O2, ceased business with the retailer earlier in 2014.

An investigation of the management of Phones4u before the company’s collapse and the role of the network operators in its downfall was completed by lawyers Quinn Emanuel in the spring. PricewaterhouseCoopers is still considering the findings and potential next steps.

Caudwell founded the chain in the mid-1980s and netted more than £1bn when he sold it for £1.5bn in 2006.

Powered by article was written by Sarah Butler, for The Guardian on Wednesday 23rd December 2015 00.01 Europe/London © Guardian News and Media Limited 2010