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Kesa Electricals
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03 ноября 2012, 00:01

Apple sky-high as Comet falls to earth

UK chain enters administration and Japan's electronics industry slips into crisis in shadow of US firm success and online marketAs Britons queued up outside Apple stores to get their hands on the latest iPad on Friday it looked like business as usual for the UK's retailers.But it was a different story for staff at stricken electricals chain Comet who were dealing with a different type of scrum as shoppers rushed to spend vouchers and collect purchases before administrators from Deloitte took charge.The formal appointment of Deloitte ended the uncertainty hanging over the 236 store chain and its 6,611 staff, and with no white knight-style buyer waiting in the wings, its financial collapse stands out as one of the darkest days for the embattled high street since the demise of Woolworths four years ago."Our immediate priorities are to stabilise the business and begin an urgent process to seek a suitable buyer which would also preserve jobs," said Deloitte partner Neville Kahn.The high street has suffered a painful contraction as the prolonged recession ate into consumers' wallets. Electricals retailers have been particularly hard hit as their business hinges on a buoyant housing market, with people moving house a key trigger for sales. "Comet has been battling the changing landscape of the electrical retail sector for many years," said Kahn. "It has become increasingly difficult for it to compete with online retailers which don't face the same overheads such as store rents and business rates."But the queues at Apple and Comet – albeit for very different reasons – are not unconnected, said Kantar Retail analyst Bryan Roberts: "Electricals is a market where the fortunes of retailers are determined by the ability of suppliers to create new products that will tempt shoppers to spend. One of the big issues is that in recent years all the big product innovations have come from Apple which sells through its own shops and website with only a small percentage of sales through third party retailers."While the Apple star has burned brighter than ever, other players in the cut-throat sector are looking more like white dwarfs. The Japanese electronics industry is in crisis with Sharp warning this week of a fight for its survival after annual losses of $5.6bn. Together Panasonic, Sharp and Sony are expected to rack up losses of $46bn this year, effectively wiping out nearly two decades' worth of profits. "In the UK we have reached saturation point," said Roberts. "If you want a plasma television or an iPad the likelihood is you have probably got one. Unless the likes of Sharp and Panasonic are coming up with something amazing every 18 months then the market reverts to a replacement cycle which slows the whole market down."But the might of Apple is just part of the story behind 79-year-old Comet's fall to earth. It was fighting for air in an increasingly crowded market as the supermarkets as well as websites such as Amazon looked for a piece of the action. But despite blame being laid at the door of online retailers, retail experts argue some of its problems were self-inflicted. Even before being cast off by its stock market-listed parent Kesa (now Darty) at the beginning of this year, when it was bought by private equity house OpCapita, it had been losing ground to rivals for several years, neglected in favour of its more successful sister chains in mainland Europe. At the last count the loss-making chain's turnover had shrunk from 2008's high of £1.7bn to around £1.3bn as shoppers defected to rivals such as John Lewis and Currys - or kept their wallets shut altogether.Despite the growing love affair with smartphones and tablet computers, Conlumino analyst Neil Saunders said the equivalent of nearly four Comets in sales terms had disappeared from the electricals market during the last five years' downturn.The market will be worth around £18.4bn this year compared with £23.4bn in 2007, a huge figure Saunders said marked the height of the consumer spending boom which preceded the financial crisis. The electricals specialists have not been the main beneficiaries of smartphone mania with many phones tied to network contracts , while collapse in demand for desktop computers has partly negated the tablets boom. "Fewer people are buying PCs and the price has come down a lot," he said.But perhaps Comet's biggest crime was failing to keep up with consumers who expect a seamless shopping experience whether browsing in a store or online, said Saunders. Electricals rivals such as Currys, PC World owner Dixons, as well as John Lewis had done a much better job of marrying "bricks and clicks" retailing: "For many years under Kesa, Comet was a neglected brand. It didn't put much effort into its stores or multichannel systems to bring the online and store channels together. When OpCapita took it on it was already a weak player in a difficult market and there was a big question mark over whether it could be turned round."The answer was clearly no.CometAppleComputingTablet computersRetail industryTechnology sectorJapanAsia PacificZoe Woodguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. 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01 ноября 2012, 04:33

Comet: more than 6,000 jobs at risk

High-street electrical chain is estimated to have lost £35m in a year and could go into administration on ThursdayMore than 6,000 jobs are at risk as the troubled high-street electricals chain Comet teeters on the edge of administration.Comet, the UK's second largest electrical specialist after Dixons, has struggled to make headway as supermarkets and online retailers such as Amazon targeted the cut-throatmarket, and could go into administration as soon as Thursday. It is estimated to have made a loss of £35m in the year to 30 April. In a sign of the toughness of the market US giant Best Buy pulled out of the UK last year after struggling to gain a foothold.Industry sources said Comet faced a cash crunch after trade insurers cut credit lines to suppliers, forcing them to ask for payment for goods upfront. Deloitte is understood to be waiting in the wings to handle the administration of the 240 stores, although they are expected to remain open for business in the meantime.The retailer has been hard hit by the collapse in consumer spending caused by the financial crisis, and French company Kesa paid OpCapita £50m to take the loss-making chain off its hands just nine months ago. OpCapita paid a token £2 for the chain.Comet's failure would be more bad news for a retail sector that has been hit by a series of collapses this year, including household names such as JJB Sports, Game, Peacocks and Blacks Leisure. Although the brands still survive, the subsequent restructurings have resulted in hundreds of store closures and thousands of job losses. Last month more than 2,000 jobs were lost at JJB alone after administrators were unable to find a buyer for the stricken sportswear chain.The spate of collapses has contributed to the blight of empty shops on Britain's high streets, with a recent report from PwC and the Local Data Company calculating an average of 30 store closures a day in July and August.In the original sales document, OpCapita had promised to keep Comet going for 18 months and its rapid decline will attract scrutiny of its stewardship. In a previous guise the same firm, which is run by former investment banker Henry Jackson, took over the running of furniture chain MFI in 2006 after securing a £130m dowry from its owner. It was sold on two years later but fell into administration soon after the deal went through.In an interview this year with the Financial Times, Jackson, the former head of Deutsche Bank's consumer and retail practice, insisted its strategy was not to make money from winding down businesses. "We are not liquidators. We don't look at businesses based on realising asset value," he said. "What we are about is operational change."OpCapita had drafted in industry heavyweight John Clare, a former chief executive at Dixons, to lead the turnaround of Comet. On OpCapita's watch, staff numbers have been reduced from nearly 10,000 to 6,500 as it cut costs and closed stores. In a recent interview Clare said trading had stabilised but last month the mood music changed after reports that OpCapita had received unsolicited approaches from rival groups interested in buying it although industry sources suggested there was little appetite for the chain, describing it as a "basket case".Reports that the business could change hands again were said to have caused suppliers to toughen their terms for dealing with the retailer, magnifying its financial problems.OpCapita took on little financial risk when it bought Comet and the source suggested the firm would not be out of pocket in the event of an administration. OpCapita bought about 300 Game stores from its administrators.Comet was previously part of stock market listed Kesa, which has since renamed itself Darty and the former parent remains on the hook for Comet's pension scheme which is thought to be around £40m in the red.It is unclear whether the administration of Comet would be a precursor to a sale, or result in a break up with stores sold off to other retailers. Comet and OpCapita could not be reached for comment.Retail industryDixons RetailAmazon.comInternetZoe Woodguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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13 сентября 2012, 12:30

Darty’s chief to step down after revamp

Lossmaking electrical retailer formerly called Kesa may sell some southern European operations following disposal of Comet