Vertu, the maker of ultra-expensive bejewelled feature phones and smartphones is to be wound up after the company failed to secure a new round of funding.
That’s according to the Financial Times, which reports that the company is to be liquidated. It follows a series of changes in ownership, ending up this year in the hands of a Turkish exile accused of fraud in his home country.
The closure of the company will cause job losses for up to 200 staff, although the writing had been on the wall for some time. Just over two weeks ago, staff were complaining that their June wages were overdue, and the company’s published accounts indicated that in 2014 it made a loss of £53m on sales of just £110m.
Vertu’s devices were made at its manufacturing facilities in Hampshire and featured embedded jewels, such as rubies and sapphires, as well as expensive materials, such as gold and alligator leather.
Prices started for its core ‘Signature’ feature phones at around £11,000 for the cheap and nasty Stainless Steel Black Leather model and scaled all the way up to £39,100 for the tasteful Clous De Paris Red Gold model, which is encrusted in 18-carat red gold and clad in black leather.
Vertu cloud architect Rob Charlton explained how the IT side of the company delivered its services at the Computing DevOps Summit last year. “If you spend £10,000 on a phone it has to work,” he told the audience, adding that even with Vertu’s most basic devices there were 60 million lines of code that could cause any number of problems.
The Signature devices ran Linux, but would have been outdated ten years ago and didn’t offer app stores or any of the other accoutrements that even the global jetset might expect from a device at one-fiftieth or one-hundreth of the cost.
However, the company also offered a range of Android smartphones, starting at £4,500 for the leather-clad Aster range.
Earlier this year, the company unveiled the Constellation, which in terms of specification didn’t look too bad, and was also mercifully free of gold, sapphires, rubies, emeralds and other evidence of more money than taste. However, this never quite saw the light of day.
One of the key features of Vertu devices was a button on the handset that could summon a 24-hour concierge service, but this was suspended earlier this year to enable the company to “focus on developing a completely new, next generation suite of services”, which was to launch in September 2017.
Vertu was established by Nokia back in 1998 when the Finnish company was the runaway global market leader in mobile phones. It sold out to private equity group EQT VI in 2012, retaining only a ten per cent stake.
The company had shifted around 450,000 devices by 2015, sold via a network of 500 retailers, including 70 owned and operated by the company itself. Vertu was passed on by EQT to Hong Kong-based Godin Holdings in 2015, and then sold on again to Turkish exile Hakan Uzan for £50m in March this year.
The Uzan family were pushed out of Turkey more than ten years ago after a string of business failures, including family-owned Imar Bank.
That prompted the Turkish Turkish Savings and Deposits Insurance Fund to seize more than 200 companies in the Uzan Group in order (it claimed) to plug the black hole.
The Turkish government, meanwhile, accused the Uzan family of a major fraud at the bank – a charge they denied – and the family sought asylum in France.
Vertu was put into liquidation after a planned pre-pack administration – in which an indebted company does a quick in-and-out of bankruptcy, washing itself of much of its debts – was rejected by the courts.
Uzan had offered just £1.9m to pay to the creditors of the company, who were owed £128m. However, Uzan held on to the Vertu brand name, although that probably won’t be worth much.
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