Thousands of jobs are at risk as Comet, the 240-store electricals retailer, is poised to appoint an accountancy firm as administrator just nine months after the UK chain was bought for a token £2.
The chain's owner Opcapita, the private investment firm, is understood to have lined up Deloitte as administrator for Comet after the retailer's financial situation deteriorated ahead of the peak Christmas trading period. Though Comet has struggled to get credit insurance since Opcapita bought the UK chain from Kesa Electricals (now renamed Darty) in February, insurers are thought to have further withdrawn cover for the retailer's suppliers in recent weeks.
Comet could file a notice of intention to appoint Deloitte as administrator as early as today, which would give it 10 working days' protection from creditors to hammer out a rescue deal or implement a formal insolvency.
If Comet, which is the UK's second biggest electricals chain, did collapse, it would, in effect, leave Dixons Retail, the owner of Currys and PC World, as the last man standing with more than 500 stores in the UK market.
Even if Comet is rescued, a new owner is likely to buy it out of a pre-packaged administration. Reports emerged last month that Opcapita was considering selling Comet after it received unsolicited offers.
However, sources believe these were only for parts of the business, such as its website, brand or a small number of stores. It is likely that big retailers, such as one of the grocers, will buy some of Comet's biggest, profitable stores but swaths of shops are expected to close. This raises the possibility of a stock liquidation sale ahead of Christmas, with Comet's stock estimated to be worth about £120m.
John Clare, the former boss of Dixons, is Comet's chairman.
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