The retail industry is still struggling to recover after several tough years on the high street which saw traditional chains such as Woolworths, the GAME Group and JJB Sports enter administration. Most recently, electrical specialist Comet has been forced to admit defeat as a result of the tough trading conditions, leaving thousands of employees facing an uncertain future.
This week, administrators at Deloitte have announced their plans to close 125 additional stores, adding to the 41 branches which have already ceased operations. These closures will take place over the next few weeks, with the first casualty being the chain’s distribution centre based in Harlow, Essex.
With the 125 additional store closures, a further 3000 Comet employees will find themselves searching for alternative employment, adding to the 1500 workers who have already lost their jobs as a result of the company’s administration.
Unfortunately, the bad news does not end there, as Deloitte have officially set a deadline for any potential buyers to step in. Should no suitable buyer be found by December 18th, the company will fold entirely, taking the number of jobs lost between now and Christmas Day to 5,000 – the total number of employees still working for Comet.
Joint administrator for Comet, Chris Farrington, today voiced his hope that a resolution will soon be found, making further job losses within the company unnecessary.
He said; “We remain in discussions with a small number of interested parties and hope that a positive outcome can still be achieved.
“Should any acceptable offers be received for stores we will delay the closure process.
“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. If a sale is not possible we would envisage stores to begin closing in December.”
Rumours have been circulating heavily as to the identities of possible buyers, with rival chains such as Dixons Retail and TK Maxx thought to be in early discussions with Deloitte. These chains would be unlikely to buy out the whole business, thus acquiring its debts as part of the sale in return for a reduced price, but instead would opt to buy a percentage of Comet’s commercial property portfolio which would then fall under the umbrella of their own brands.
Entrepreneur Clive Coombes is also heavily rumoured to be a potential buyer for the business, yet it is uncertain whether he has the funding to purchase 180 stores along with the Comet brand. Buying out the brand is a risky move, as many retail experts agree that it was Comet’s poor customer service which caused consumers to turn to rivals such as Currys, but this could be turned around under new management thus making the brand successful once more.
So far, the only confirmed interested party is Appliances Online, which wishes to purchase the website and rights to the Comet brand for “a seven figure sum” in order to allow the business to continue as an online retailer. Should they prove successful in their venture, Comet will swap rivals such as Currys and Dixons Retail for online competitors such as Amazon and play.com.
Yet while discussions with potential buyers continue, the livelihoods of more than 5000 employees hang in the balance. In an era which has seen many big name brands collapse, the question must be whether high street retailers can continue to be successful when faced with growing competition from the internet marketplace.
Do you think that the chances of a buyer stepping forward to save the brand and employees before the deadline is likely, or do you believe that this Christmas may not be so merry for the 5000 remaining Comet employees? Why do you think so many popular high street brands are failing – is it simply due to the lack of disposable income causing consumers to save rather than spend, or is it failings within the chains themselves? Will the average high street retailer be able to survive as internet brands such as Amazon and play.com go from strength to strength?
Previous Post
Phones 4U Continues to Open New Shops 4U
