Comet enters administration, Deloitte seeks buyer
LONDON (Reuters) - British electrical retailer Comet has gone into administration and audit group Deloitte is now seeking a buyer to try to save jobs at the latest UK store chain to fall victim to the consumer downturn.
Deloitte said on Friday that it had been appointed administrator to Comet, confirming the company's statement on Thursday that it was set to enter administration.
"Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs," Deloitte's Neville Kahn, joint administrator and restructuring services partner, said in a statement.
Directors of the struggling company, which employs 6,500 staff in 240 stores, filed a notice on Thursday to a British court.
A raft of other British retailers have also fallen into administration this year, including Clinton Cards, Game Group, Peacocks and Aquascutum, as the double-dip recession took its toll on consumer spending.
Administration is a legal move which provides companies with breathing space to discuss any possible survival plan with their nominated administrator.
Deloitte said Comet would continue to trade and staff would be paid "in the meantime".
Comet, which analysts estimate has a 6 percent UK market share, was acquired by private investment firm OpCapita for a nominal 2 pounds from Darty (then known as Kesa Electricals) in February, with Darty paying OpCapita a 50 million pounds dowry to take the loss-making business off its hands.
Comet ran into trouble when suppliers tightened their terms as the firm attempted to reach its peak stock requirement ahead of Christmas. Trading without the credit insurance that protects suppliers meant it had to pay cash up front for goods.
(Reporting by Sarah Young, Editing by Mark Trevelyan)
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