Phones 4u, a mobile phone retail company that is based in the United Kingdom, said that it is seeking the appointment of administrators from PricewaterhouseCoopers.
The move comes after EE, the largest mobile operator in the U.K. and a key partner of the company, said that it will not renew its network agreement with Phones 4u.
The network agreement contract between Phones 4u and EE, which comprises Orange and T-Mobile, runs until September next year.
However, despite the remaining time that is left on the contract, Phones 4u decided to go into administration as the impending non-renewal of the contract is a big blow to the business.
The agreement with EE became more crucial for Phones 4u earlier this month when Vodafone Group informed the company that it will not be renewing a similar contract that it had with Phones 4u.
According to the company, decisions of Vodafone and EE were unexpected and "have come as a complete shock to the business."
Phones 4u has closed all of the company's 550 stores in the country, which employs a total of 5,600 workers. The stores will remain closed until administrators make the decision on whether or not to re-open the company for trading.
"Today is a very sad day for our customers and our staff. If the mobile network operators decline to supply us, we do not have a business," Phones 4u CEO David Kassler said in a statement.
"A good company making profits of over £100 million, employing thousands of decent people has been forced into administration," Kassler added.
Phones 4u received EE's decision only upon the end of business on Friday, which would mean that all Phones 4u employees would be reporting for work on Monday.
The company said that the employees would be informed of Phones 4u being put into administration by management in all stores and in the head office. While the stores remain closed under administration, the employees will continue to receive their pay until further notice.
According to an EE spokesperson, the company's decision for the non-renewal of the contract with Phones 4u was "driven by developments in the marketplace that have called into question the long term viability of the Phones 4u business."
The EE spokesperson added that the company made the decision as part of its strategy to focus EE's growth in its own direct channels.
Phones 4u said that an administrator is expected to be appointed by Monday next week.
