New owners, OpCapita, plan to invest £30 million (and potentially a back-up of £40 million) into Comet in an effort to turn the business around, and original owners, Kesa Electricals, are also planning to contribute a £50 million dowry to the chain’s revival. Many, however, are skeptical about the turnaround’s chances for success.
Sales of consumer electronics have struggled in the UK recently, and Comet’s sales were down 20% in the first six months of the fiscal year.
The new owners have pledged not to close any of its 248 stores or make job cuts, but few are confident that the retailer will once again become profitable. With plenty of competition in the market and online retailers offering lower prices, it will be very difficult for Comet to win customers back. OpCapita have pledged a continuation of the cost-cutting plans that were initiated by Kesa, but have not yet announced much else regarding their plans for Comet.
Even though it required a £50 million investment in Comet, selling off the money-losing business for just £2 has resulted in a small bump in the stock price for Kesa Electricals. There is a non-compete clause, but the company said it was unlikely they would want return to the UK electronics market in the near future.
It’s still unclear exactly how far Comet will be able to bounce back from their recent troubles and adjust to the new market conditions, but Comet’s employees will hopefully know more about their future once the details of this agreement are finalized.
What do you think of Comet? Do they have a chance at making a comeback?
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November 9, 2023
business