Kesa: Losses will not affect sale of Comet
Kesa Electricals was confident that the sale of its Comet electrical retail chain would be completed as agreed, despite the group slumping into the red in the first half.
The electrical retail group, which owns Darty in France as well as the 248-store Comet chain in the UK, reported a €9.2m (£7.8m) loss in the six months to November, as weak consumer spending quadrupled the deficit at its British operation to €25.7m. Group revenue fell by 7.6 per cent to €2.6bn, as Comet's sales dived by 21 per cent to €683m.
The poor performance of Comet fuelled speculation that OpCapital, the investment group that last month agreed to buy the UK chain from Kesa for a nominal €2m, may struggle to raise the €46.8m of working capital required under the terms of the deal. That loan will be secured against Comet's assets.
However, Kesa chairman David Newlands insisted yesterday that the deal was on track to complete on 3 February. Meanwhile, Thierry Falque-Pierrotin, chief executive, said the situation showed little sign of improvement.
Mr Falque-Pierrotin said: "We have experienced weakening market conditions in the first half of the year. What we've been seeing since the start of the third quarter for us (starting 1 November) is actually the same trends that we saw at the end of the second quarter. It's a declining market but on the same negative numbers we saw at the end of the second quarter.
"We are well prepared for peak season and in the face of ongoing tough market conditions are adjusting our cost to serve."
As part of its deal with OpCapital, Kesa agreed to give the investment firm €58.6m and to take on its pension scheme in return for taking the chain off its hands. Overall, Kesa will take a total writedown of €200m on the deal.
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