The BBC reports this morning that electrical goods retailer Kesa has announced plans to sell off its troubled UK-based Comet stores to a private equity firm for just £2.
The buyer is a group of companies under the name “Hailey” advised by retailer turnaround specialists OpCapita.
Kesa said it will itself invest £50m into the new holding company, and will retain liability for the Comet employees’ final salary pension scheme.
Kesa said it would benefit from any subsequent onward sale of the chain, however, it would only do so if the resale price were greater than £70m which, certainly under current market conditions or those predicted for the foreseeable future, seems very unlikely.
The investment group, under OpCapita’s guidance, has also attracted £30m of outside private equity investment and a £40m loan facility.
Responsibility for warranties and servicing will remain with Comet, but a €73m (£62m) fund to support these will be transferred by Kesa to the UK company.
The buyers have promised to keep Comet as a going concern for at least 18 months.
Revenues at the loss-making Comet electrical stores fell 22% over the summer, prompting Kesa’s chief executive to say that a decision would be made by Christmas about whether to dispose of Comet.
The sale is expected to involve the closure of some of Comet’s 250 stores. The parent company has already confirmed the closure of 17 Comet stores and “right-sizing” of a further nine in the next three years.
At this point there is no news of what will happen with servicing and logistics areas of the new retail operation but it would seem improbable that these would remain unchanged.