Sat, 03 Nov 2012 | BUSINESS SALE
Late on Friday, 2nd November 2012, Comet succumbed to the insolvency practitioners, as it collapsed into administration. The company employs over 6000 staff across 243 stores and a handful of depots.
The company's ecommerce website appears to have shut down, with a message that says: 'Sorry comet.co.uk is currently unavailable'. However the stores are still fully manned and operating and are expected to remain so until the end of the pre-Christmas fire sale that the administrators, Deloitte, are likely to commence in order to draw down as much inventory as possible before finally closing up. The business restructuring firm, GA Europe, is thought to have been appointed to assist Deloitte in managing the process.
Although Deloitte is said to be urgently looking for a purchaser for the business, it is thought highly unlikely that a white knight will be found at this stage. Competitors, including Dixons, are currently looking over the best-performing Comet stores in a bid to snap them up on favourable terms. But the majority of stores are likely to be simply closed for good.
Prior to the appointment of administrators, Opcapita, the owners of the chain who had bought the business for £2 nine months ago, had already received expressions of interest for the best stores and other parts of the company.
Comet had been experiencing lower than expected sales volumes brought on by a shortage of stock in turn caused by the withdrawal of credit insurance. Suppliers were just too nervous to offer credit without insurance in place and Comet did not have enough ready cash to purchase stock outright.
Added to this malaise was the general consumer move towards online shopping, resulting in ferocious price pressure in an already competitive marketplace. Although Deloitte also cited fewer first-time property buyers as a factor in Comet's demise, what may have presented a bigger problem for the retailer was its poor customer service reputation, not helped by a tough returns policy.
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