CEO says company will restructure amid financial troubles
Wileyfox will ‘restructure and continue’ despite entering administration last week, says CEO Michael Coombes (pictured above).
The British smartphone manufacturer entered administration after Russian bank Promsvyazbank (PSB) collapsed.
Coombes told Mobile News the company will continue after it resolves difficulties resulting from its owner Meridian Capital Partners being starved of funds due to the bank’s collapse.
PSB was bailed out by the Central Bank of Russia two months ago. However the CBR has restricted lending to companies outside of Russia thus choking off Wileyfox’s ultimate source of finance.
Around 50 staff have been let go across its European bases. Coombes said business will resume after a restructure.
Generation three devices and the Wileyfox Pro are still scheduled for a release this year, while customers can still expect repair services and software updates.
“We’re restructuring the whole business and will continue,” Coombes said.
“PSB collapsing in December was a surprise, we’ve been forced into this until we can fix it.
“Customer service will continue in regards to repairs and updates. There will be a couple of days where we cease operations due to administrative process.
“Future phone launches will only be pushed back a couple of days, the Wileyfox Pro will be released this month.”
Wileyfox sold smartphones at under £200 mainly through online partners such as Carphone Warehouse.
An ex employee claimed on Reddit that Wileyfox is in the hands of administrators Quantama. The Reddit post read: “Wileyfox Europe Limited is in administration.
Andrew Andronikou and Andrew Hosking are appointed joint administrators and act jointly and severely without personal liability”.
Former CEO Nick Muir said it was a “sad day, for both the industry and consumers.” Muir departed the vendor after a “misalignment in direction” in March 2017.
He added: “Victoria Denman and I launched Wileyfox as a pureplay brand. It grew into a fantastic brand. I’m very proud to have co-founded and launched it.
“But decisions were made that I disagreed with. This latest news appears to be the final destination.”
Canalys analyst Ben Stanton said Wileyfox appears to be “finished for good. If it survives it still faces the continued domination of larger brands in the sub-£200 space”
“Wileyfox management set out an aggressive growth strategy, and set budgets accordingly for marketing and sales.
“But Wileyfox never capitalised on its fast start in the low-cost unlocked market. Wileyfox always lacked innovative hardware.
“It tried to offset this with a targeted social media marketing strategy, and very low pricing. But the bigger vendors proved better at both of these things.”
Wileyfox’s troubles began when auditors Hacker Young stated: “uncertainty concerning the company being a ‘going concern’”.
Total current assets stood at £191,270 a 89.6 per cent drop from £1,846,223 (source: Creditsafe).