Vodafone to close Crazy John's stores
300 jobs are under threat with the Crazy John's chain of mobile phone stores forced to close down.PT0M0S 620 349
John Ilhan was once the richest man in the country under 40. Little more than five years after his death, the mobile phone empire he built is gone, saddening his widow.
Patricia Ilhan, wife of the late Melbourne entrepreneur, said she was “very disappointed” that Vodafone has decided to shut down the Crazy John's chain of mobile phone stores that he founded.
- Quotable quotes: Crazy John in his own words
Business success ... Late Crazy John's founder John Ilhan with wife Patricia. Photo: Jessica Shapiro
Mrs Ilhan, who sold her share of the Crazy John's brand to Vodafone for an estimated $150 million in 2008, said through a family spokesman this morning that she was “very disappointed with the decision but that it was a matter for Vodafone”.
The spokesman said Mrs Ilhan would not be making any further comment.
Up to 300 jobs are reportedly at risk after Vodafone said it planned to close down the Crazy John's chain of mobile phone stores on February 20.
End of the line ... Crazy John's. Photo: Michael Clayton-Jones
It is understood that about 40 of 60 stores currently operating could be closed. The remaining stores would be rebranded into Vodafone stores, the company said in a statement.
Mr Ilhan, the son of Turkish migrants, grew up in working-class Broadmeadows in Melbourne. He started his career as a salesman at Strathfield Car Radios before opening his first mobile phone store in Melbourne in 1991.
He made Crazy John's into one of Australia's largest independent phone retailers. Never shy of publicity, the businessman was a regular in the business pages and on lists of Australia's most wealthy people, and offered advice and insights for people hoping to emulate his success.
In October 2007, he collapsed while walking near his home in Brighton, Melbourne and died.
Vodafone said the “tough decisions” were taken as part of a move to streamline its retail offering into one brand.
Crazy John's customers would continue to be supported through Vodafone stores and its dealerships, the company said, adding that they would be transferred on to the Vodafone network.
"During this transition period we are committed to ensuring a smooth transition for our customers and will do our best to redeploy as many Crazy John's retail employees as possible to work in one of our many Vodafone stores," the company said.
"It wasn't an easy decision to make but it is necessary to remain competitive and to ensure we focus our investment where our customers and people will benefit most."
Telecommunications analyst Paul Budde said all three providers in Australia - Telstra, Optus and Vodafone - have had to grapple with the cost of investing in 4G networks, market saturation in the mobile phone market, and stagnating revenue opportunities.
"You can't grow the market any further, so they've got the problem of increasing costs with the same sorts of revenue, so you have to start looking at where you can cut costs," Mr Budde said.
He said Vodafone had "missed the boat with smartphones".
"They never really understood the impact of smartphones and their network was not capable of handling the enormous amount of traffic that started to occur," he said.
Parts of Vodafone's network collapsed in 2012, leaving some without coverage or the ability to receive data.
Last year, Hutchison Telecommunications Australia, which owns 50 per cent of Vodafone Hutchison Australia in a joint venture with the UK's Vodafone Plc, reported a net loss of $131.3 million in the first half of 2012.
Vodafone Hutchison Australia lost 178,000 customers in the same period, with its customer base dropping to 6.8 million.
With Mark Hawthorne