Last week it was announced that Phones4U went into administration, putting 5,596 jobs at more than 700 outlets at risk, after Vodafone, EE and O2 did not renew their contracts with the company.
Original founder, John Caudwell, described it as an "unprecedented assassination" as he believes the mobile giants may have congregated about ending their contracts with Phones4U. Are they under any obligation to continue trading with Phones 4U though?
However, EE argued that its decision to end its relationship with Phones 4U was strategic, as they look to focus on their own shops and cut out intermediaries. They seemed to of hugely benefitted from the Phones 4U collapse as they have strengthened their position and bought out 58 Phones 4U stores.
Can the middle man survive on the high street now? Being a middle man can be a very profitable role but also highly risk as there is a lack of power. With EE looking to 'cut out intermediaries', will this relate to other retailers such as Carphone Warehouse in the future? This move seems to open up many questions regarding trading in the mobile environment.
While private equity firm BC (that owned Phones 4U) has been criticised for loading the retailer with more than £200m debt. Unfortunately Phones 4U staff will pay the price for this irresponsibility.
In hindsight it seems like a mess, it also shows just how fragile a reputable high retailer is in the 21st century. Could this have a knock on affect to other industries as they look to cut out intermediaries and increase security in a fragile environment? Only time will tell.
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