A few days ago a story broke from Sky News that the current owner of the electrical chain Comet, OpCapita, was exploring the possibility of selling the Comet business a mere eight months after taking control of the ailing retail chain.
As usual a number of unnamed “sources close to the matter” have revealed that there has been approaches made to buy the business including other private equity firms.
But whether the Comet business model can survive in the current world, with traditional bricks and mortar retailers closing thirty stores a day according to a report from Pricewaterhouse Coopers which is evidenced by the other well known retail chains that have recently collapsed such as JJB Sports, Clintons and others.
Since taking over the business OpCapita has gone to great lengths to reduce operating costs including cutting staff numbers from around 8,500 to about 7,000 as well as reportedly closing five stores and the entire Comet Service division.
The current Comet chairman and, ex Dixons (Currys, PC World) chairman, John Clare has said that the business is on track to get turned around but, he would say that wouldn’t he, even in the face of analysts predicting a £35 million loss.
The situation no doubt exacerbated by the lack of credit insurance that Comet can get to secure supplies. For months in the trade there has been strong rumours that Comet cannot get risk insured meaning, in effect, that Comet has to pay up front for the goods that is sells.
It looks as if Comet could be in for a rough ride in coming months.