UK electricals giant Comet set for administration
on 01/11/2012 13:04:28
The 240-strong chain confirmed plans for it to be placed into administration next week, marking one of the UK's biggest retail failures in recent years.
Staff were informed of plans this morning and restructuring specialist Deloitte has been lined up to handle the administration.
Comet said it was "urgently working" on plans to secure the company's future and it is expected that administrators will seek a buyer for the business.
Customers with outstanding orders and those with gift cards and vouchers are being told it is "business as usual until further notice" and that the group intends to fulfil deliveries of products that have been paid for.
The administration raises the prospect of a pre-Christmas rush for discounted stock, with the administrator expected to wind down supplies and raise cash for creditors.
News of the planned administration follows just months after Comet was taken over by investment firm OpCapita, which bought the chain for a nominal £2 in February.
It is thought OpCapita and recently-appointed chairman John Clare - the former boss of rival Dixons - had been unable to secure the trade credit insurance needed to safeguard suppliers.
Shares of Comet's rivals rose on news of the planned administration, with PC World and Currys parent Dixons Retail leaping by 15%.
Comet's collapse is one of the biggest since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports. Other recent casualties have included Clinton Cards, Blacks Leisure, Game and Peacocks.
The high street electricals market in the UK has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances and online rivals take a bigger slice of the sector.
America's Best Buy recently pulled the plug on 11 giant electrical stores after failing to make inroads into the UK market.
Comet was founded in 1933 by George Hollingbery in Hull as Comet Battery Stores Limited - a two-man business charging batteries and accumulators for customer's wireless sets.
The company moved into the radio rental business and by 1939 had 2,500 accounts.
The first Comet superstore opened in Hull in 1968 and the company was listed two years later, before being acquired by Kingfisher for £129m (€160m) in 1984.
Comet then acquired Norweb Retail and increased its store portfolio to more than 250 nationwide in 1996.
It demerged from Kingfisher in 2003, with Comet and its sister electrical companies throughout Europe forming a new group known as Kesa Electricals, which recently changed its name to Darty.