Dixons Carphone to keep on 800 Phones 4u staff

Up to 800 Phones 4u staff are to keep their jobs after Dixons Carphone received the all-clear to offer jobs to workers who had been operating mobile phone concessions in its PC World and Currys outlets.

A further 4,200 jobs remain at risk after Phones 4u fell into administration on Monday. Administrators at PricewaterhouseCoopers have said there is enough cash to pay staff for another day and they could begin to lay off workers and permanently shut down parts of the business from Thursday if buyers for all or part of the business are not found.

The three administrators are talking with potential buyers for some of the group's 550 stores, including mobile operators EE and Vodafone, which have been accused of forcing the demise of Phones 4u by withdrawing their business from the chain.

The concessions in a further 160 PC World and Currys stores ceased trading and reverted to the newly merged Dixons Carphone group when Phones 4u collapsed. The retailer said it wanted to take on all its staff and reopen as soon as possible.

The concessions are likely to be rebranded under the Carphone name over time but PwC made clear the agreement with Dixons Carphone did not include the sale of stock or the Phones 4u brand name.

It is understood the retailer has about 300,000 handsets in stock, which the administrators will either sell or return to manufacturers. Phones 4u's demise has also left customers unsure about their rights. The retailer's insurance arm also fell into administration on Wednesday with the same team from PwC taking on the job. A spokesman said all policies were safe and claims would continue to be handled but there would be a short delay in processing them because of shop closures.

Dan Schwarzmann, joint administrator and PwC partner, said: "We would like to reassure all policyholders with an active Phones 4u Care or Premierplan mobile phone insurance policy that your policy remains in force in accordance with its terms and conditions." Phones 4u Care customers can call a dedicated hotline, 0333-222 6730, for further information.

Administrators said they were continuing to engage with a number of parties – likely to include coffee shops, e-cigarette sellers and nail bars, which operate from similar-sized outlets – about the future of Phones 4u's stores. EE and Vodafone are also looking at buying up to several dozen of Phones 4u's standalone stores. The closure of all Phones 4U's outlets earlier this week is the biggest one-day shut-down of a chain since Woolworths collapsed in 2008 according to high street analysts Local Data Company.

Vodafone and EE were accused on Monday of playing a central role in Phones 4u's downfall. The company's private equity owner, BC Partners, said Vodafone had behaved in a way "designed to inflict the maximum damage" on Phones 4u while it described EE's decision to withdraw its business from Phones 4u last week as surprising.

Phones 4u sells mobile-phone contracts and handsets to consumers on behalf of operators but its business model has been irreparably damaged by networks deciding to open own-branded outlets instead.

In an outspoken attack on Monday, Phones 4u's founder, John Caudwell, blamed the company's demise on its owners and former partners.

"It's astonishingly ruthless. Vodafone have had millions upon millions from Phones 4u over 25 years. It's dreadful for British business.

Sources close to one of the mobile operators said that they had made clear for some time that they were reviewing their relationship with Phones 4U and discussions had broken down after the retailer refused to offer improved terms on a historic agreement.

Meanwhile a group of Phones4U bondholders said they would look into launching a rescue plan for the company. A spokeswoman for the bondholders said: "We have proposed a restructure of the business that means the capital structure will no longer be an impediment to achieving the commercial outcome which allows the company to continue as a going concern."