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Wednesday, January 19, 2022

Comet retailer to go into administration

Around 6,500 retail jobs are at risk after electrical chain Comet confirmed that it will be put into administration next week.

Private equity firm OpCapita, which owns the 240-store business, has lined up restructuring specialist Deloitte to act as administrator.

OpCapita bought Comet last year for just £2, but the business has struggled from the downturn in consumer spending.

BBC reported that Comet’s demise is one of the biggest High Street casualties of recent years.

Two weeks ago, OpCapita, said it was examining a number of potential bids for the retailer.

The administrator will run the business as a going concern while it assesses options for sales, closures and liquidation.

Comet said it was “urgently working” on plans to secure the company’s future. Customers with outstanding orders are being told it is “business as usual until further notice” and that the group intends to fulfil deliveries of products that have been paid for.

Shares of Comet’s rivals rose on news of the planned administration, with Dixons Retail, which owns PC World and Currys, jumping 15 per cent as investors speculated that a major competitor could be removed from the market.

OpCapita bought Comet last February from Kesa Electricals, which had itself struggled to turn around the business. Comet is thought to have had operational losses of about £35m last year.

The economic downturn and pressure on consumer spending has led many people to put off purchases of big-ticket items such as TVs and large appliances. But sales of such items have also moved increasingly online.

Dan Wagner, a technology entrepreneur who has backed several internet businesses, told the BBC that Comet “was an accident waiting to happen” because successive managements had failed to understand the online world.

Retailers must now offer multi-channel options – shops, a website, purchases via mobile phones – to be successful, he said. “Comet failed to understand the importance of this for driving business.”

Comet is one of the biggest retail casualties since the demise of Woolworths in 2008. Other recent High Street collapses have included JJB Sports, Clinton Cards, Blacks Leisure, Game, and Peacocks.

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Comet retailer to go into administration

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