Business

Comet 'could cease trading by Christmas'

Comet store in Hendon, north London
Image caption Closing down sales have already begun in several stores

Comet is unlikely to be trading beyond Christmas, the head of the firm wanting to buy the insolvent electrical chain's website has told the BBC.

John Roberts, boss of Appliances Online, said it was "very unlikely" administrators Deloitte would be able to sell Comet as a going concern.

He said he has made an offer of "millions" of pounds for the chain's brand and website.

Deloitte said it was in talks with a small number of potential buyers.

It wants to sell the business as a whole, rather than split the physical stores from the online division.

Earlier, Deloitte announced plans to close another 125 stores, beginning next month, if a buyer could not be found. That would leave just 70 stores from the original 236.

Reports suggest more than 3,000 jobs could be affected by the latest round of store closures.

"Should any acceptable offers be received for stores, we will delay the closure process," said joint administrator Chris Farrington.

"Unfortunately, in the absence of a firm offer for the whole of the business, it has become necessary to begin making plans in case a sale is not concluded."

'Spiralling costs'

Reports earlier this week suggested that entrepreneur Clive Coombes was in discussions with Deloitte about making an offer for 180 Comet stores.

But Mr Roberts, founder and chief executive of Bolton-based Appliances Online, said 85% of Comet's white goods were delivered and yet it "no longer has any delivery network".

He said it was a business that relied on high volumes, and closing stores was undermining vital economies of scale. "Costs spiral when you close stores, and the business is massively cash hungry," he said.

"It's very, very unlikely that a white knight will emerge for these operational reasons... [so] I do not believe Comet will trade beyond Christmas."

If Deloitte cannot find an outright buyer, it would have to sell off the assets of the group - the leases on the physical stores, the stock and the brand and website.

Mr Roberts said he had made an offer for the stock as soon as the administrators were called in, which was rejected. He has also made an offer for the brand and website worth "millions".

He said his company was ready to take on the brand. "We either compete against ourselves or against somebody else, and I'd rather we compete against ourselves," he said.

He said he would reposition the Comet brand more towards customer service.

More than 1,000 employees, out of a total of 6,611, have been made redundant since Comet went into administration at the beginning of this month.

The chain has struggled to cope with the drop in consumer spending in the UK since 2008, and is the latest in a long line of High Street retailers that have gone out of business during the downturn.

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites