Phones 4U pledges to refund Apple iPhone 6 buyers after it goes under

Private equity-owned phone shop chain goes bust after mobile operators pull out - leaving iPhone buyers high and dry

People who rushed to buy Apple iPhones following the launch of the iPhone 6 and iPhone 6 Plus could be left out of pocket following the collapse of mobile phone retailer Phones 4U.

The retailer called in administrators on Sunday night after the last mobile operator supporting the company, EE, announced that it was pulling out. Vodafone had announced that it would stop supplying Phones 4U earlier in the month, choosing to focus on the merged Carphone Warehouse and Dixons Group instead – as well as investing in its own network of retail stores.

However, people who had signed contracts to buy new iPhones via Phones 4U or its subsidiary Dialaphone could be left with a £500-plus bill for goods they will not receive as a result of the company's bankruptcy, which will put 5,500 jobs at risk.

Stores will be closed today pending the decision of the administrator over whether the company can be saved or should be closed down, together with its 720 outlets.

"If the mobile network operators decline to supply us, we do not have a business. A good company making profits of over £100m, employing thousands of decent people has been forced into administration," said CEO David Kassler. However, after interest on loans and taxes, the company made just under £20m in profit.

The company has pledged to refund customers "in full" for any iPhone 6 orders that have not yet been dispatched, although that decision may be affected by the adminstrators. "Any orders that have not already been dispatched will be cancelled and any payments refunded to customers," according to spokesman Robert White.

Phones 4U's website, meanwhile, has been taken offline and replaced with just the following message, which won't assuage the fears of anyone who has placed an order with the company in the past week or two: "Following the unexpected decision of EE and Vodafone to withdraw supply from Phones 4U, we regret that we are offline. Please accept our apologies and we will update you as soon as possible."

Concerned customers can therefore only contact customer services on 0800 072 5855 to find out whether and when they will be getting their money back.

Dialaphone, meanwhile, sold contracts online offering rebates throughout the life of the contract out of the commission the company received. It is unclear whether Dialaphone customers will continue to receive rebates, even if the company is sold by the administrators as a going concern.

Phones 4U was founded in 1996 by entrepreneur John Cauldwell. It became known for its high-pressure sales environment, but was sold to private equity by Cauldwell in September 2006 for £1.47bn.

It was acquired by its current owners, BC Partners, in March 2011, part financed by a £430m bond issue. It conducted another bond issue earlier this year, taking the opportunity to pay itself a £200m dividend at the same time.

However, that level of indebtedness combined with the decision by mobile operators to consolidate their sales channels left Phones 4U in a precarious competitive position.