High street electrical retailer Comet is in real danger of going into administration, putting as many as 6,000 employees at risk of losing their jobs. This is despite the fact that OpCapita bought out the chain several years ago for just £2.
Over the past year, it is being said that the chain lost £35 million and has struggled to keep sales up with increased competition from supermarkets and online retail, further lowering margins on electrical goods. Administration firm Deloitte is set to take over in the next few days – with the administration beginning as soon as today.
If it does enter administration, it wouldn’t be the first big name British retailer to do so in the past couple of years. GAME famously almost folded, until it was bought by OpCapita, while JJB sports also suffered through. Despite the brands surviving however, most have been gutted, with hundreds of store closures and thousands of people losing their jobs.
John Clare, a former chief executive at Dixons was previously brought in by OpCapita to help stabilise Comet. However despite letting go almost half of the workforce, the chain has still failed to become financially successful. It has now received notice that its lines of credit have been halted, meaning all stock needs to be paid for upfront – the death knell of a large volume retailer.
Source: The Guardian