Phones4U Falls into Administration After Loss of Key Contracts

Mobile phone chain Phones4U fells into administration last week after the loss of its supplier contracts with Vodafone and EE. Problems began for Phones4U in April 2012 when mobile phone giant Three pulled its business from Phone4U. This was followed by loss of the contract with O2 in January 2014. Vodafone finally pulled the plug by withdrawing its contract last week. EE promptly followed as Phones4U could no longer offer the customer choice though a single network provider.

The large network providers have decided to cut out the middleman and have brought the selling of handsets in house. Phones4U employs 6,000 staff who’s jobs are now at risk and operates 720 retail outlets which will be closed on Monday. The company has debts of £635m compared to operating earnings of £105m according to 2013 results.

S&P500 Breaks 2000 Barrier to Reach All Time High

The S&P500 broke the 2000 barrier in August to reach an all time high. The stockmarket index has continued to rise during the first week of September and currently stands at 2007 on 5 September 2014. The bull market run in equities continues amidst an era of low interest rates and quantitative easing.

Confidence in the economic recovery in both the US and UK has been met with a rise in demand for IT contractors with a high number of roles on the market in August and September 2014. Whilst the market remains competitive, demand for experienced developers, big data analysts and other IT specialists remains high.

Tesco Cuts Dividend After Profit Warning

Tesco, Britain’s largest supermarket chain, announced a profit warning last week, citing poor market conditions and increased competition from discount retailers Aldi and Lidl. Tesco subsequently cut its dividend and shares fell by more than 6%. The shares are now down more than 30% compared to prior year. Tesco is not the only supermarket suffering from the impact of price wars.  Morrison’s shares have declined by more than 32% this year.

The global economic recession has taken its toll on the major UK supermarkets. The proposed sanctions against Russia, combined with poor economic growth in Europe suggest that we may well hear further profit warnings from large caps over the coming months.