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Comet retailer close to administration, say reports Comet retailer to go into administration
(about 1 hour later)
Comet, the electrical retailer, is close to going into administration, putting about 6,000 jobs at risk, reports say. Around 6,500 retail jobs are at risk after electricals chain Comet confirmed that it will be put into administration next week.
The company, bought by private equity firm OpCapita last year for just £2, has struggled from the downturn in consumer spending. Private equity firm OpCapita, which owns the 240-store business, said restructuring specialist Deloitte had been lined up as administrator.
Two weeks ago, OpCapita said it was examining a number of potential bids for 240-strong chain. OpCapita bought Comet last year for just £2, but the business has struggled from the downturn in consumer spending.
But there are reports Comet will appoint an administrator imminently. Comet's demise is one of the biggest High Street casualties of recent years.
The Financial Times and trade journal Retail Week said that OpCapita had lined up Deloitte to act as administrator, which would run the business as a going concern while it assesses options for sales, closures and liquidation. Two weeks ago, OpCapita said it was examining a number of potential bids for the 240-strong chain.
The administrator will run the business as a going concern while it assesses options for sales, closures and liquidation.
Comet was sold to OpCapita last February by Kesa Electricals, which had also struggled to turn around the business. Comet is thought to have had operational losses of about £35m last year.Comet was sold to OpCapita last February by Kesa Electricals, which had also struggled to turn around the business. Comet is thought to have had operational losses of about £35m last year.
The economic downturn and pressure on consumer spending has led many people to put off purchases of big-ticket items such as TVs and large appliances. But sales of such items have also moved increasingly online.The economic downturn and pressure on consumer spending has led many people to put off purchases of big-ticket items such as TVs and large appliances. But sales of such items have also moved increasingly online.
Dan Wagner, a technology entrepreneur who has backed several internet businesses, told the BBC that Comet "was an accident waiting to happen" because successive managements had failed to understand the online world.Dan Wagner, a technology entrepreneur who has backed several internet businesses, told the BBC that Comet "was an accident waiting to happen" because successive managements had failed to understand the online world.
Retailers must now offer multi-channel options - shops, a website, purchases via mobile phones - to be successful, he said. "Comet failed to understand the importance of this for driving business."Retailers must now offer multi-channel options - shops, a website, purchases via mobile phones - to be successful, he said. "Comet failed to understand the importance of this for driving business."
Should Comet go under, it would be one of the biggest retail casualties since the demise of Woolworths in 2008. Other recent High Street collapses have included JJB Sports, Clinton Cards, Blacks Leisure, Game, and Peacocks. Comet is one of the biggest retail casualties since the demise of Woolworths in 2008. Other recent High Street collapses have included JJB Sports, Clinton Cards, Blacks Leisure, Game, and Peacocks.
America's Best Buy recently pulled the plug on 11 giant electrical stores after failing to make inroads into the UK market.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 as a business charging batteries for wireless sets. It opened its first store in 1968, in Hull, and was bought by Kingfisher in 1984, which expanded the Comet brand into one of the most familiar names on the High Street.Comet was founded in 1933 as a business charging batteries for wireless sets. It opened its first store in 1968, in Hull, and was bought by Kingfisher in 1984, which expanded the Comet brand into one of the most familiar names on the High Street.