New boss Bob Darke rules out mass store closures, CVA or pre-pack administration
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Struggling electricals retailer Comet has ruled out large-scale store closures, a pre-pack administration or a CVA as its parent Kesa considers hiving off the store group.
Comet managing director Bob Darke moved this week to reassure staff that Comet would not resort to such drastic measures to stem its slump in profits.
In an email sent to staff and seen by Retail Week, Darke insisted: “There is certainly no plan whatsoever from Comet or Kesa to close large numbers of stores.”
“The idea that we might be going out of business is preposterous,” he wrote, adding “no decisions have been made at this stage by Kesa regarding a potential sale of Comet”.
The statement comes after reports at the weekend suggested Kesa was considering selling Comet to focus on its French business or ditching a large number of stores via a pre-pack.
Analyst and private equity sources believe the electricals retailer’s pension liabilities could stymie any sale attempt by the Anglo-French group.
It is understood the issue has put off potential purchasers of the 248-store chain in the past. A Kesa spokeswoman declined to comment or say how big the pensions liabilities are.
Darke – who took over from Hugh Harvey after he exited Comet earlier this month – revealed to staff this week that he plans to guide the electricals retailer into the black in the next 12 months.
He also revealed that Carl Cowling will be returning to the business in November in a senior role. He was most recently managing director of airport operations for Dixons.
Comet is expected to make a loss in the year ending April 30, as it revealed last week its like-for-likes plunged 15.2% in its final quarter bringing the full-year fall to 7.7%.
The retailer is facing tough market conditions within the electricals market, which Thierry Falque-Pierrotin, chief executive of Kesa, said had been tough “following the VAT rise”.
Comet hoped its rebrand last September would help it compete with Dixons and new entrant Best Buy. It unveiled a new logo, strapline and in-store approach that aimed to differentiate its mid-sized stores from its big warehouse rivals.
The retailer has taken measures to reduce its cost base. 40 head office staff have been made redundant this year. It is also consolidating 14 of its regional service centres to two sites and is closing one of
its three warehouses. The retailer said the move will cut costs by £10m per year.