Struggling Comet to lose up to 10 UK stores

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The Independent Online

Comet's owner Kesa Electricals is to close up to 10 stores this year after suffering another slide in UK sales.

The retailer, which has 248 outlets in the UK, will also shut one of its three warehouses and axe 12 of its 14 regional service centres, which are used as a base by its engineers who repair and service its products.

With Comet closing between five and 10 stores this year, Kesa said it expects to make 150 redundancies in the UK, including 40 recent job cuts at Comet's head offices in Hull and Rickmansworth in Hertfordshire.

Same-store sales at Comet fell15.2 per cent in the 12 weeks to 30 April and are now down 7.7 per cent over the past year as the retailer struggled in difficult market conditions following January's increase in VAT to 20 per cent. Online sales in the UK were down 8 per cent.

Kesa warned that Comet will make a loss this year after trade was disrupted by snow in the run-up to Christmas. Kate Calvert, an analyst at Seymour Pierce stockbrokers, described the latest UK sales performance as "shocking". The company said it was likely that the warehouse to close would be in Corby, Northamptonshire, although this is subject to consultation.

Kesa's business in France, where it trades as Darty, saw a 5 per cent rise in same-store sales in the final quarter of the financial year but this was offset by struggling markets such as the UK and Spain.

Overall like-for-like sales were down 3.1 per cent in the period, which was slightly better than the City's expectations of a fall of 5 per cent.