Last week's rumours that electrical chain Comet was on the verge of collapse were confirmed on Friday when it called in the administrators.
Comet, which is headquartered in Rickmansworth, operates out of 236 stores across the UK, and the move puts thousands of jobs at risk: the company employs 6,611 people - a full-time equivalent workforce of 4,682 employees.

It is only a year since the business was taken over by private equity firm OpCapita, which bought the chain from Kesa Electricals for a token £2. The turnaround specialist was unable to revive Comet's fortunes - but there is press speculation now that the investors may yet make a profit while consumers lose out.

As a leading secured creditor, OpCapita is first in line for any money that may come out of the business, and it could potentially walk away with millions. At the same time, while Comet customers are being told that if they have paid for goods and the products are in stock they will be delivered, they may be disappointed if Comet does not have the stock.

Administrators Deloitte said Comet's collapse had been triggered by a number of factors, including slow demand, internet competition and cash flow problems - resulting from suppliers demanding payment up-front.

In a statement it said: "Like many other retailers, Comet has been hit hard by the uncertain economic environment, slow consumer spending and lack of consumer confidence. The electrical retail sector has been particularly challenging, with fewer people buying big-ticket items, and fewer first-time property buyers who have historically been an important market for the company.

"Despite significant investment in the business and the efforts of the experienced management team, Comet has struggled to compete with online retailers, which have far lower overhead costs and can offer cheaper products."

It went on: "Against a backdrop of continuing weak sales, and speculation that Comet was being approached by prospective buyers, suppliers have been reluctant to provide credit terms, which has had a negative effect on cash flow. The inability to obtain supplier credit for the peak Christmas trading period, means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading."

Joint administrator Neville Kahn - who also led Woolworths' administration - said Comet had been "battling the changing landscape of the electrical retail sector for many years. It has become increasingly difficult for it to compete with online retailers which don't face the same overheads such as store rents and business rates."

He said Deloitte would now be urgently seeking a suitable buyer for the business, but that all stores would continue to trade and all employees be paid. The stores are currently running sales in an effort to generate funds quickly.