Comet sales plummet to earth

The electricals retailer hasn't had a great year. In fact, it's looking increasingly likely that its owner is minded to sell.

by Emma Haslett
Last Updated: 06 Nov 2012
Comet is having a tough time not burning up in the UK’s consumer atmosphere. The electricals retailer’s financial results make for unpleasant reading, having chalked up losses of €10.3m (£9.2m), while revenues fell by 6.8% to €1.8bn in the year to April 30. That’s a fairly diabolical performance, whichever way you look at it – although Kesa, the company’s owner, managed to scrape a 2.2% rise in revenues. Is it time for someone to put Comet out of its misery?

Now admittedly, Things have been looking shaky for Kesa for a while: in fact, it issued its most recent profit warning in January. The good news is that its underlying pre-tax profit managed to edge just ahead of forecasts to €93.2m, rather than the €91.1m expected. But that still meant the end for some of Comet’s stores: two closed last year, bringing the total to 249, while a further 17 will be closed over the next three years and nine will apparently be ‘right-sized’. Sounds ominous…

Not surprisingly, the company said the next few months are likely to represent something of a challenge. That’s an understatement: on top of falling consumer confidence and rising inflation putting consumers off making big-ticket purchases (like tellies), there’s the small matter of the World Cup. Because, when compared to last year’s sales (remember the sudden frenzy of people buying 52-inch, mega-HD, 4D super-screens?), its sales in the next quarter are going to look particularly dire. And we’re sure the VAT rise hasn’t done much to help, either.

It’s not just Comet that’s having a tough time of it: Best Buy, Argos and Dixons are all similarly beleaguered, while Kesa’s French arm, Darty, is actually doing ok. Being an Anglo-French company, Kesa is now faced with a tough choice: to stay in the UK, or call time on its Anglo roots, closing or selling off Comet and upping sticks across the channel, de-listing from the London Stock Exchange and re-listing in France. The City would prefer a sale, but whether they will get one remains to be seen.

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Finance Retail

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