Comet, the UK's second-biggest electricals chain, collapsed into administration last night, leaving nearly 7,000 jobs hanging by a thread ahead of Christmas.
The 236-store chain, which had been acquired by the private investment firm Opcapita for a token £2 just nine months ago, has appointed the accountancy firm Deloitte as administrators after a rapid deterioration in its finances.
It has suffered from dire trading on big-ticket items recently and credit insurers pulling cover for its suppliers.
Deloitte's Neville Kahn, who ran the administration of Woolworths in late 2008, said: "Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs. In the meantime, all stores will continue to trade and all employees will continue to be paid."
Industry experts doubt that the accountancy firm will find a buyer for Comet – whose chairman is John Clare, the former chief executive of Dixons Retail, which owns Currys and PC World – as a going concern.
However, the retailer is likely to find a purchaser for its brand, website and a small number of its stores in the best locations.
Therefore, any rescue deal is likely to see a large numbers of stores close. This makes it increasingly likely that Deloitte will run a massive stock liquidation sale before Christmas, as it did with Woolworths four years ago. The value of Comet's stock is estimated at £120m.
Mr Kahn said: "Comet has been battling the changing landscape of the electrical retail sector for many years. It has become increasingly difficult for it to compete with online retailers which don't face the same overheads such as store rents and business rates."
OpCapita, whose chief executive is Henry Jackson, acquired Comet from Kesa Electricals (renamed Darty) in February, with a £50m dowry.
The retailer, which was founded in 1933, employs 6611 people and made an estimated loss of £35m in the year to 30 April 2012, on revenues of £1.3bn.Reuse content