Kesa eyes Comet options as trade worsens
Kesa Electricals is working on a plan to revive Comet’s fortunes but at the same time said it is considering its “strategic alternatives”, which it is thought could include a sale of the 249-store business.
The announcement, which will heighten speculation that electricals megastore chain Best Buy may look to buy Comet, comes a month after another high street stalwart, Mothercare, said it was planning to close 110 stores to focus on out-of-town sites.
Advertisement
Hide AdAdvertisement
Hide AdKesa - the owner of the Darty chain in France - posted annual results today showing Comet made a loss of £8.9 million in the year to April 30. Total sales fell 6.8% to £1.54 billion - down 7.7% on a like-for-like basis.
It added that trading conditions remained tough across the group, with sales below expectations in the early part of the new financial year. This is in line with similar downbeat comments from rivals such as the Carphone Warehouse brand Best Buy and catalogue retailer Argos.
Kesa said it was taking action to improve Comet’s performance through store refits and initiatives such as dedicated areas for accessories and a refreshed brand.
In an effort to drive down costs, it recently announced it will shut one of its three warehouses and axe 12 of its 14 regional service centres, which are used as a base by its engineers who repair and service products.
Advertisement
Hide AdAdvertisement
Hide AdIt also expects to close nine under-performing stores this year.
Kesa chairman David Newlands said: “We have a strong turnaround plan for Comet to restore its profitability in the medium term and in parallel we are examining strategic alternatives to ensure the best overall value for shareholders.”