Comet heads back into black under new owners

Since private investment firm OpCapita bought the electricals retailer from Kesa for £2 in February, full-year equivalent savings of £50m have been made, chairman John Clare told Retail Week.

Having stabilised the business, Clare and his team – led by chief executive Bob Darke – are now optimistic that they can drive embattled Comet forward.

Clare said that although Comet is still loss-making at an EBITDA level, that measurement has improved every month year on year since OpCapita took over. 

He said: “We’re now climbing out of the hole and on track to get positive EBITDA this financial year if current trends continue. 

“Break-even or better is our target for year one. If we do that it points to opportunities in year two.”

He said Comet had not been “cost-adjusted for recession” under its former ownership and infrastructure expenses were too high. 

But he acknowledged: “You can’t cost-cut your way to long-term recovery. We’re now transitioning the business to growing the top line. We’re focusing more and more on retailing, by which  I mean buying and selling, and taking the business away from distractions.”

He said there is “a lot of work still to do in the stores”, but that the biggest changes would not show through until next year.

Comet’s store numbers are unlikely to change significantly, said Clare, who expects the total to stay at about 240. However, the retailer aims to downsize about 20 large shops of 25,000 sq ft to its preferred size of 12,000 to 15,000 sq ft.

Comet will continue to exploit its reputation for value and Clare was confident that stores can be an advantage despite the growth of online retail.

He said: “What we’re looking to provide in store is exposure to new products, ranges and brands. We’re going to focus on the things that customers want to touch, try and have explained.”

The emphasis is likely to be on products such as big TVs, domestic appliances and computers. 

Clare said Comet had benefited from the support of suppliers and employees since OpCapita’s take-over. Staff numbers have been reduced from 8,500 to about 7,000, but the retailer now wants to hire 500 part-timers.