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Comet electrical stores heading into administration

by Mark Tyson on 2 November 2012, 13:00

Tags: Comet, DSG International (LON:DXNS)

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Comet was founded in 1933 as “Comet Battery Stores” and became a pioneer in out-of-town shopping in the 1970s. The company has confirmed that it has plans to call in the administrators next week. This will be the biggest UK high street failure since Woolworths went down the pan in 2008. Comet employs about 6,500 people, operates 240 large sized stores and an e-commerce website.

Accountancy firm Deloitte will look at various options for the administration. Comet could yet be sold as a going concern, scaled back (like GAME) or simply liquidated. One of these options is going to be decided upon next week, though no exact date was given. If you have Comet vouchers it is suggested you spend them this weekend.

The Guardian says that Comet was in chaos yesterday as its website crashed and its suppliers arrived to commandeer stock at the stores. Comet chief executive Bob Darke sent an email to staff saying the board is “urgently working with its advisers to seek a solution to secure a viable future”.

In the last financial year Comet made a loss of £35 million and parent company Kesa Electricals decided to sell it to venture capitalist company OpCapita for a sum of £2. Without the large parent backing it with credit insurance suppliers were not keen to leave stock at Comet and therefore the range on offer at Comet has dwindled. Not good for a business already struggling.

Strong competition from internet retailers and supermarkets stocking a wide range of white and brown goods and computers haven’t helped Comet either. Dixons, Maplin and Argos (Home Retail Group) are all quite happy about the removal of another high street competitor of course. Dixons shares hit a 22 month high yesterday, up 14 per cent following the breaking news and have continued to be buoyant today, up 7.5 per cent so far.



HEXUS Forums :: 28 Comments

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Feel sorry for all there staff, but glad I never bought my new tv from there last month now
Vale Comet I hardly knew ye.
Actually, that was the problem. They didn't invest in customer service and their online presence.
How to compete with online only boxshifters who have no retail presence to pay for?

It just surprises me they've lasted this long - same with DSG.
IMHO people buying the same gadgets are interested in

1) Price
2) Customer service / ease of RMA
10) Buying experience

Comet and DSG are doomed.
I was in our local comet last week and was the only person in the shop for a good 20 minutes - apart from about 5 staff floating about.

The problem that Comet had is that they were simply box shifters operating in retail premises - for instance the tv's were poorly set up and you could learn more in 5 minutes reading on the internet than the majority of their staff seemed to know about the relevant products.

Our high streets are fast becoming populated by charity shops and pound shops and I am not sure what that says about where we are heading ...