Comet profit warning shocks investors

The retail sector is continuing to suffer at the hands of the housing market slowdown with the Comet electrical goods chain warning yesterday that it is heading for a loss because of disappointing sales of refrigerators and washing machines.

The company, part of the pan-European Kesa Electricals giant, believes that people are unable to move home and are not splashing out on new household appliances. Comet is also suffering because more people are shopping online.

The scale of the setback during the three months of the year to the end of July surprised analysts. Sales at the chain of 251 stores fell by a thumping 9.9 per cent. This is far worse than the rival electrical chain Currys, which has reported sales 7 per cent lower.

The company defended its position and said it had protected margins by refusing to slash prices to draw buyers into its stores. "One day the cycle will tick up – in the meantime the business is refusing to chase unprofitable revenue," said an adviser. Sales of laptops and televisions were more resilient, although the company admitted "we now anticipate Comet will make a loss in the first half".

Kesa's arguments did not satisfy the stock market, which marked its shares down by nearly 10 per cent. Analysts slashed profit forecasts for the current year. Overall, Kesa, which takes in the French electrical chain Darty and other retail outlets operating throughout Belgium, Holland and Slovakia, reported a 4.7 fall in sales for the opening quarter. Darty fared better than Comet with sales down by 3.2 per cent, but conditions in France remain tough and the scale of the slowdown also caused concern in the market.

Nevertheless, the chain remains on the lookout for suitable acquisitions. Darty had 150,000 subscribers at the end of July for its Darty Box, a combined internet, digital-television and telephone package and is hoping to sign up another 100,000 customers by next April.

Jean-Noel Labroue, the chief executive, said: "We are still in the middle of the storm. Trading conditions across all our markets deteriorated particularly in the UK and have not changed since the period end.

"As we did not expect to see any improvement in the short term, we put in place a robust action plan to protect margins, adjust costs and generate cash."

Elsewhere, Kesa's newer ventures in Spain proved disappointing, "reflecting very poor market conditions".

Stock analysts at Landsbanki warned: "Growth of the internet channel looks likely to create major problems threatening both market share and margins."

The concern was shared by the broker Citi, which said the deterioration across the group "should surprise the market on the downside". It expects a fall of 10-15 per cent in profits for the year to £115m-£120m. The shares finished 15.5p lower at 142.5p.

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
CSKA Moscow celebrate after equalising with a late penalty
football

Arts and Entertainment
music
Life and Style
Designer Oscar de la Renta takes a bow after showing his Spring 2015 collection in September, his last show before his death
fashionThe passing of the legendary designer has left a vacancy: couturier to America’s royalty, says fashion editor Alexander Fury
Life and Style
tech

Company reveals $542m investment in start-up building 'a rocket ship for the mind'

News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why