* Comet to file notice to appoint administrators - source
* Comet demise comes 9 months after Darty sold firm to
* Dixons shares up 13 pct, Home Retail shares up 4 pct
By James Davey
LONDON, Nov 1 British electricals retailer Comet
is set to file a notice to appoint administrators, a person with
knowledge of the situation said, becoming the latest household
name to fall by the wayside in the consumer downturn.
Directors of the struggling company, which employs 6,500
staff in 240 stores, will file the notice as early as Thursday
to a British court, lining up Deloitte as potential
administrator, the source said.
The notice to appoint administrators is a legal move
providing companies with an initial five working days breathing
space to discuss any possible survival plans with their
nominated administrator. That can be extended to 10 working days
but formal administration usually follows.
Talks will likely focus on possible suitors for any parts of
the business that can be sold.
Comet, which analysts estimate has a 6 percent UK market
share, was acquired by private investment firm OpCapita for a
nominal 2 pounds from Darty (then known as Kesa
Electricals) in February, with Darty paying OpCapita a 50
million pounds ($81 million) dowry to take the loss-making
business off its hands.
Comet ran into trouble as suppliers tightened their terms as
the firm attempted to reach its peak stock requirement ahead of
Christmas. Trading without the credit insurance that protects
suppliers meant it had to pay cash up front for goods.
The company's anticipated collapse comes a month after
British sporting goods retailer JJB Sports fell into
administration with 2,200 staff made redundant.
A raft of other retailers have also fallen into
administration this year, including Clinton Cards, Game Group,
Peacocks and Aquascutum, as the double-dip recession took its
toll, though they have re-emerged in some form.
Many British retailers are still finding the going tough as
consumers hold back spending in the face of inflation, meagre
wage increases and government austerity measures designed to cut
British retail sales picked up more than forecast in
October, a survey showed on Tuesday. However, one published on
Wednesday said UK consumer confidence fell to its lowest in six
months in October, highlighting the fragility of Britain's
recovery from recession.
The likely removal of Comet from the British retail scene
could be positive for rivals Dixons Retail and Home
Retail's Argos, whose shares rose 13 percent and 4
percent respectively, as well as the UK supermarkets such as
"The imminent demise of Comet will leave Currys and PC World
(both owned by Dixons) the masters of all they survey in
out-of-town specialist electrical retailing, even though John
Lewis, Amazon and Apple remain
formidable competitors," said independent retail analyst Nick
OpCapita and Deloitte both declined to comment.