Comet's slide into the red forces Kesa to ready the for-sale sign

Kesa Electricals has admitted for the first time that it is considering selling off its Comet chain after the British company sank to a loss of nearly £9m last year.

The pan-European electricals giant – which operates the Darty chain on the Continent – also said it would close or sell 17 Comet stores in the next three years, consolidate 14 regional service centres to just two and close a warehouse.

David Newlands, the chairman of Kesa, said: "We have a strong turnaround plan for Comet to restore its profitability in the medium term and, in parallel, we are examining strategic alternatives to ensure the best overall value for shareholders."

Knight Vinke, the activist investor with an 18 per cent stake in Kesa, is keen for it to offload Comet and focus on its successful Darty business, notably in France. But Kesa said the decision to look at its options for Comet was its own. Knight Vinke declined to comment.

Mr Newlands said Kesa had already received a few expressions of interest in Comet and its 249 shops. Comet is trying to turn around its fortunes by introducing dedicated areas in 190 stores for higher-margin accessories, refitting core branches and improving its customer service.

In the year to 30 April, Comet's margins came under pressure as weak trading forced it to discount products. Like-for-like sales fell 7.7 per cent over the 12 months but tumbled 15.2 per cent in the final 16 weeks. This weak trend is thought to have continued since its year-end.

Comet sank to a loss of £8.9m over the year as sales fell 6.8 per cent to £1.54bn. It made a profit of £11.5m last year. Adam Cochrane, an analyst at UBS, said: "As expected, Comet is persevering with its previous strategy including rebranding, €11m in back-office cost savings, focus on accessories and exiting five to 10 stores per annum as leases expire."

Total revenues at Kesa rose by 2.2 per cent to €5.92bn (£5.3m). But its bottom line was hit by exceptional restructuring costs of €30.9m related to Comet's turnaround and difficulties at its Spanish division, which resulted in the group posting a pre-tax profit of just €30.7m, down from €43m last year.

Comet is not the only UK electricals chain in the doldrums as shoppers shun purchases of big-ticket items such as televisions and washing machines. Today, Dixons Retail, owner of Currys and PC World, is likely to add to the gloom by reporting a 6 per cent fall in annual pre-tax profits to £85m. Meanwhile, Best Buy UK, the retail chain 50 per cent owned by Carphone Warehouse, is reviewing the future of its 10 "big box" electricals shops after losses ballooned to £62.2m in the year to the end of March.

In stark contrast to Comet, Kesa's Darty France chain powered ahead last year and grew its retail profits by 11.9 per cent to €149m. Darty, which has 224 stores in France, enjoyed a 4.6 per cent leap in revenues to €2.92bn.

But Mr Newlands expects "all its markets will remain challenging" for the current financial year. Kesa, which also has operations in countries such as Spain and Italy, has recommended a total dividend of 7 cents a share, up 6.1 per cent on last year.

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

Voices
Left: An illustration of the original Jim Crowe, played by TD Rice Right: A Couple dressed as Ray and Janay Rice
voices

By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen

Arts and Entertainment
music
News
John Moore inspired this Coca Cola Christmas advert
people

PROMOTED VIDEO
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

The benefits of Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes