Struggling electrical retailer in the hands of private equity

KESA Electricals is paying private equity £50m to take struggling TV-to-microwave retailer Comet off its hands.

Retail turnaround firm OpCapita will pay a nominal £2 to acquire loss-making Comet, which has 248 stores and about 10,000 staff in the UK, writes John Collingridge.

Kesa will inject £50m into Comet and retain responsibility for the chain’s defined benefit pension scheme.

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The sale will allow Kesa to focus on its other European businesses, including the Darty electricals business in France.

“The board believes that a disposal on the terms agreed with the purchasers is in the best interests of ordinary shareholders and delivers a more certain outcome than continuing with the turnaround plan,” said Kesa chairman David Newlands.

Comet, founded in Hull in 1933, is the latest casualty of the consumer spending slump since rival Best Buy announced plans to close its 11 stores in the UK, putting 1,100 jobs at risk.

With bills soaring and unemployment stubbornly high, consumers are reluctant to spend on ‘big ticket’ items such as electrical goods. Kesa has been reviewing options for Comet since June, and said the UK chain was expected to make a loss of £22.3m in the six months to October 31, after like-for-like sales fell 18.6 per cent over the period.