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Comet to cut jobs as sales fall 15%

Published: 11 May 2011
Electricals retailer Comet has seen like-for-like sales plummet 15.2% for the fourth quarter, as the company continues to struggle in difficult economic conditions.
Comet to cut jobs as sales fall 15%
Parent company Kesa Electrials released a trading statement today based on unaudited accounts, showing flat revenues for the group, and a like-for-like sales decline of 3.1%, which it said reflected challenging conditions, particularly in the UK and Spain.

Kesa chief executive Thierry Falque-Pierrotin said: "In the UK, market conditions remained particularly tough and we have accelerated our plans at Comet to reposition the business and reduce our cost base."

Like-for-like sales fell 7.7% at Comet for the full year to April 30, 2011.

Cost reductions at the retailer include consolidating its 14 regional service centres to just two sites, and closing one if its three warehouses, costing the company £20m. The measures are expected to save Comet up to £10m a year, but could mean the loss of up to 100 jobs.

The service centres provide bases for the company's engineers who provide maintenance and repair for white goods and televisions.

Comet also reported an 8% fall in web-generated sales during Q4. The company said further technical and commercial improvements were being made to the site after initial challenges following its relaunch last year.

Kesa also reported a strong performance and overall market share gains at French brand Darty France, where sales for the quarter rose 5% like-for-like. The group expects adjusted profit before tax to be in line with average current market expectations.

UPDATE: Speculation has since been rife that parent Kesa is under pressure from key shareholder Knight Vinke to sell the Comet chain. The American asset management firm has been building up its stake in Kesa over the past year and is now the group’s largest shareholder, further fuelling rumours of a break up of the business. Kesa declined to comment about speculation of a possible sale.


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