By Patrick Corby
Less than a year after being bought by the private investment firm Opcapita Comet, the U.K. electronics chain, has now confirmed it will shut the doors of at least 40 of its 236 stores.
Comet is one store in a long list of closures this year accelerating to 32 stores a day between July and August.
The culprit for Comet: Christmas. Suppliers continuing restrictive terms due to their loss of credit insurance and the stores interest payments tightening funds. Appointing Deloitte as it’s insolvency manager on Thursday they started closing stores on Saturday, Comet’s website will go down Sunday.
Plans are in the works for transference but an estimated total of 6,000 jobs are at risk of redundancy in the 236 stores. “We are in discussions with a number of parties who have expressed interest in parts of the business and we continue to work hard to preserve jobs,” Deloitte said.
Comet has been approached by numerous companies including Dixons and Maplin in a bid to buy parts of the dying Comet. With Dixons pledging to take on 2,000 workers from the store. Shares in Dixons rose 13.5 per cent in anticipation of a boost to trade from the disappearance of their competitor.
This will have a knock on affect to the landlords of Comet’s stores with a loss of £67 million if no replacement is found. They also claim Opcapital had “no sustainable business plan” which increases the reputation of Opcapita being ‘cowboys’ in acquisition. When Opcapita was looking for lower rent payments Ed Jenkins, head of retail for Standard Life Investments Real Estate said that ‘ [Comet was] reluctant to provide certain financial information to support their position.’ Others refused on the basis that reductions would go not back into business but to pay interest payments and debt.
Click here to see where the closing down sales will be.