Despite job cuts and a steep fall in sales, new managing director Bob Darke insists Comet can survive in a tough sector. George MacDonald reports.
2011 Becomes Comet managing director
2006 Joins Comet board as commercial director
2003 Becomes head of marketing
2000 Joins Comet, with commercial responsibility for grey goods
Before 2000 Various roles with Comet owner Kingfisher
It may be scant consolation to new Comet managing director Bob Darke that at least his boss knows what a tough job he has on his hands.
Thierry Falque-Pierrotin, chief executive of Comet’s Anglo-French parent Kesa, a fortnight ago described the UK as “the toughest market in Europe”, both in general economic terms and because of the intensity of competition in electricals retailing.
Darke sat down in the hot seat at the start of this month. He succeeds Hugh Harvey, who exited abruptly as the number-two retailer in the electricals category took a bashing.
Comet will make a loss this year - some analysts expect it to slip into the red by £22m - and observers have questioned whether it has a future. There has been speculation that it may be sold or embark on a large-scale closure programme. The scale of the challenge facing Darke is evident in the precipitous rate of sales decline: sales were down 15.2% in the quarter to April 30.
In such parlous circumstances, there was some surprise at Darke’s succession to Harvey. Like his predecessor, Darke is a Comet veteran and, before demerger, of parent Kingfisher.
He has been a senior Comet executive for more than a decade and held various roles, including head of marketing. He has already led one relaunch of Comet, in 2005, but six years on the retailer faces its biggest challenge: a battle for survival. Hard-pressed shoppers are cutting their spending while arch-rival Dixons and new entrant Best Buy Europe - which can also call on the muscle of Carphone Warehouse - pile on the pressure.
Darke’s long association with Comet meant his appointment surprised some observers. They thought that in the light of the retailer’s difficulties an external candidate would succeed Harvey. Some wonder whether he is likely to hold the role on an interim basis only.
Darke is not very well known by many of the analysts who follow Kesa. But he has played a central role in Comet’s attempts to distinguish itself from rivals by emphasising the un-intimidating nature of its shops, typically smaller than rivals’ megastores, with store remodelling and the introduction of the tagline ‘Come and play’.
Darke said last September that he was confident of the initiative’s appeal. “There’s nobody in the space, especially when the competition is going for bigger and bigger sheds,” he said. “Electricals are a big scary purchase for some people. More than anyone, we are well placed to do friendly and fun.”
“The idea that we might be going out of business is preposterous”
But fun is not the experience of Comet at the moment. Although store refits are said to be showing positive results, there has had to be a big focus on costs. Service centres are being consolidated and jobs cut.
Falque-Pierrotin believes one of Comet’s problems is that consumers who do not shop there do not realise what they are missing. The intention is to communicate its appeal more effectively, likely meaning that Darke’s marketing expertise will be called upon to try to ensure Comet’s survival.
But more change is likely at Comet if the retailer is to get back to form. There has been speculation that further restructuring is likely, including at a regional management level. It is thought Comet may follow the Dixons model, whereby regional operations managers report directly to the retail operations director - in Comet’s case, Mike Rooney.
Comet faces being the lightning rod in an electricals retail storm, but Darke is taking a combative approach. While speculation circulated about the retailer’s future, Darke sent an email to staff in an attempt to reassure them. “The idea that we might be going out of business is preposterous,” he said.
Some observers are not quite so sure. It is now up to Darke to prove the doubters wrong and to demonstrate to Falque-Pierrotin that Kesa should retain its UK presence. The plans for Comet should become clearer next month, when Kesa presents its full-year results.
The talking points are likely to include how the retailer will attract those elusive new shoppers, the progress of revamped stores and the future of ventures such as Game shop-in-shops.