Comet owner sees sales plunge 22%

Comet owner Kesa Electricals revealed that sales have fallen by more than a fifth

Published: 8:42am, 15th September 2011
Updated: 3:39pm, 20th September 2011

The owner of electrical goods retailer Comet has revealed a 22% plunge in sales as consumer confidence fell to a "low ebb" across the UK.

While reporting the drop in same-store sales between May and July 31, Kesa Electricals shed no light on the progress of a sale of the struggling retailer, which has 248 stores across the UK.

Chief executive Thierry Falque-Pierrotin said the group continued to examine strategic alternatives but would not comment on speculation over a potential sale - though he hopes any process will be completed before Christmas.

Mr Falque-Pierrotin said laptops, televisions and big-ticket items such as large domestic appliances were not selling, while iPads and tablet computers, headphones and large TVs with 43-inch plus screens were performing well.

Kesa, which also owns Darty France and Dutch retailers Vanden Borre and BCC, reported a 9.9% decline in overall group sales, which was supported by a stronger performance in France and the Netherlands.

Recent reports suggested talks between Kesa and the last two interested buyers - corporate restructuring specialist Hilco and private equity group OpCapita - have come to a halt.

Mr Falque-Pierrotin said Comet, which has around 10,000 employees, was focusing on its turnaround plan, which includes improving margins and a store refit programme. The sales performance was also hit by comparisons to a strong selling period last year due to the World Cup, when sales of television sales surged.

The Comet.co.uk website saw an increasingly improved trend throughout the period but overall internet growth was hit by the decision to align store and web prices, Kesa said. The move led to a reduction in "click and collect" sales.

Kesa said one store was closed in the period and a further 60 stores will be refitted before the peak trading season.

Looking ahead, the company said "market conditions are likely to remain challenging for some time". Shares were down less than 1% on Thursday following the update.