Comet Going Into Administration Next Week [Updated]
03/11/2012 | Nicholas Griffin
The UK Electrical Retailer, Comet have just confirmed that they will be entering administration next week with an over 240 high street store and 6000 jobs currently at risk.
This could mean that all or some will start disappearing, but it’s likely at least some high street stores will be closed alongside with the jobs involved within those stores.
The company which is currently the 2nd largest electrical store next to Dixons, has been hit hard by the collapse of consumer spending during the UK recession, and this isn’t even the first time for the store after Kesa paid OpCapita £50 million to buy-out the store just 9 months ago.
Sources within the industry have said that the store has faced a loss of cash after trade insurers cut credit lines to suppliers, which forced them to pay for goods they wish to sell up front, which according to experts has led to loss of £35 million since April.
Its unclear what exactly will happen to the business during the course of this administration, but we will keep you up to date hoping that the retailer manages to stay in the UK without too much loss.
Source: The Guardian
Update: Neville Kahn who is a partner in the Deloitte restructuring team has commented on the administration revealing that all 236 stores will remain open over the weekend and employees will continue to receive pay until further notice.
In his statement he said the following:
“Our immediate priorities are to stabilise the business, fully assess its financial position and begin an urgent process to seek a suitable buyer which would also preserve jobs,” he said.
“Comet has been battling the changing landscape of the electrical retail sector for many years, It has become increasingly difficult for it to compete with online retailers which don’t face the same overheads such as store rents and business rates.”
“The inability to obtain supplier credit for the peak Christmas trading period means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading.”
As you may have noticed Comet’s site has also been taken down several times since the new first broke, this is reportedly due to a uncertaininty of the company’s stock levels, however the company has said they will fulfill all deliveries that have already been paid for, but it seems the company is due to close as they have also told any shoppers to spend any gift cards or vouchers as soon as possible.
Source of update: The Guardian