Over the past year, news of multiple companies going into administration has hit the headlines. Clinton Cards and JJB Sports are just two of those falling victim to incredibly tough trading conditions.
The most recent big name administration to be announced was that of electronics retailer Comet, after mounting competition from rival chains and supermarkets finally managed to crumble the British giant’s resolve.
Currently, administrators are searching for a buyer for the chain– yet there may be another way for the retailer to continue as a business, though not necessarily with a presence on the high street.
Does Comet have a future as an online retailer?
It was confirmed on Friday that John Roberts, founder and chief executive of internet retail site Appliances Online, has entered a “seven figure offer” for the stricken chain’s website so the brand could continue as a solely online business. Should the bid prove successful, the Comet brand will switch high street competitors such as Currys and PC World for more fast paced online rivals such as eBay and Amazon.
Yet Mr Roberts has admitted that a lot of factors hang in the balance to determine whether Comet would be more of a success online than it has been on the high street during the past few years. He believes that poor customer relations were responsible for the failure of the chain – something that will need to be repaired in order for the brand to have a chance of a successful future.
Mr Roberts said; “We hope to run the Comet brand online but that will depend on rescuing the brand before too much damage is done through the administration process.
“However, our reputation combined with the Comet brand’s resonance would make a powerful force.
“It is unlikely that Comet will survive on retail parks, which leaves Currys in a very strong position – our job is now to ensure choice and competition.”
Meanwhile, administrators Deloitte are rumoured to be considering a bid for 140 of the 190 Comet branches which are currently up for sale. The name of the bidder has not yet been released, but Deloitte has confirmed that it has held discussions with a number of parties who are interested in different aspects of the business.
Should the mystery buyer succeed in acquiring the 140 stores, more than 2000 employees’ positions could be secured with the chain. So far, around 1500 staff members have been made redundant after store and depot closures came into effect earlier this month. 27 stores have been shut down, meaning that a further 14 will have to close by the beginning of December in order for Deloitte to remain on target for the administration process.
Yet Mr Roberts hopes that, by stepping in to take control of the online side of the business, more jobs could be salvaged from the collapsed chain.
He says; “We can’t comment on administrator plans for the Comet stores and it is upsetting when jobs are in the balance.
“However we are currently recruiting for more than 100 roles in Bolton, and a number of colleagues from Comet stores have applied.”
Do you think that Comet could continue as a viable online brand, or has the administration process caused irreparable damage to the brand’s reputation? Should the priority of the administrators be to make back as much money for the shareholders as possible or to attempt to salvage the positions of as many employees as it can?
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