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Examination ordered as Comet shuts up shop for the last time
COMET’S last remaining stores were trading for the final time today as it emerged that events surrounding the chain’s collapse are to be examined.
The fact-finding exercise by the company investigations branch of the Insolvency Service will cover the run-up to administration and Comet’s takeover by a private equity-backed investment vehicle in February.
Deloitte, which was appointed to run the electricals retailer in November, will close the final 49 stores today, having failed to find a buyer for any of the 235-strong estate. The collapse will cost a total of 6,895 jobs.
Comet, which was founded in Hull in 1933, is one of the biggest high street failures since the demise of Woolworths in 2008.
With insufficient funds raised from the winding down of the chain, it emerged last night that the Government will have to pick up the tab for £23.2 million of outstanding redundancy pay, accrued holiday pay and pay in lieu of notice.
And a further £26.2 million will be lost in unpaid tax to HM Revenue & Customs, which is an unsecured creditor.
The creditors report from Deloitte showed the investment vehicle put together by American Henry Jackson of OpCapita, which raised funding from unnamed investors for Comet’s takeover from French retail group Kesa Electricals, is expected to recoup just under £50 million as a secured creditor, although the exact financial impact of the administration is not clear.
It received a £50 million dowry from Kesa as part of the acquisition and continues to own Comet’s warranties business, which is not in administration. The vehicle was also repaid a £9.5 million loan prior to the collapse.
The report states the chain racked up losses of £95 million in the year to April, having seen revenues slump by £200 million on a year earlier.
This was followed by a further £31 million loss in the subsequent five months as credit insurers lost confidence and withdrew support for the business.
Comet was hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.
In particular, it was knocked by the lack of first-time homebuyers who were key customers for Comet.
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Weather for Yorkshire
Wednesday 22 May 2013
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