Comet's new owner leans on landlords to reduce rents

OpCapita determined to cut costs at the troubled electrical retailer with some stores to be axed

Comet is pressuring landlords to slash its annual rental bill of £77m just days after the private equity firm OpCapita paid a token £2 for the beleaguered electricals chain.

Property executives at the 248-store retailer have stepped up their demands for monthly rents since the deal was completed in the first week of February, which involved owner Kesa in effect paying OpCapita £50m to take the loss-making chain off its hands.

While such rent requests by struggling retailers are relatively common, it is understood that, as part of its due diligence on the chain, OpCapita has also graded Comet's stores into A, B and C categories.

It is thought that Comet could seek to renegotiate rents on many of its stores. But the retailer has also tested the appetite of landlords to take the least profitable stores off its hands, in addition to earmarking the weakest shops for possible closure when their leases expire.

The electricals retailer's new owner has denied that large-scale store closures are on the cards. A Comet spokesman said: "There are no plans under OpCapita ownership to close stores beyond the handful of stores where Kesa had already taken the decision not to renew the lease".

Nevertheless, the recent activity by Comet's property team is the latest example of the cost-cutting measures that OpCapita is pushing through as it seeks to turn around the chain's fortunes.

Comet suffered a dreadful Christmas, with its like-for-like sales plummeting by 14.5 per cent between 1 November and 8 January. This fall came on the back of a calamitous loss of €25.7m over the half year to 31 October.

On Thursday, Comet told staff of its plans to axe at least 450 repair and support roles. Bob Darke, the retailer's chief executive, said: "The proposal to reduce staff numbers has been a very tough decision to make. But significant savings are required to secure the long-term viability of our business."

The company said the measures were to align it with other electrical retailers by reducing its investment in electrical field repairs "to focus resources more single-mindedly on store operations".

Meanwhile the Korean television giant Samsung has yet to complete a long-term supply agreement with Comet. The issue is thought to relate to the Korean company securing trade credit insurance to supply the retailer.

Comet's rivals have also found the going tough over the past year. The US giant Best Buy exited its 11 UK stores last month. Dixons Retail, which owns Currys and PC World, saw underlying sales in the UK and Ireland fall by 7 per cent for the 12 weeks to 7 January.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
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

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral