High street electricals: a mug’s game

IN the end, they couldn’t even give it away. As well as taking on Comet’s pension scheme, which is in deficit to the tune of €45.9m, Kesa is having to pay a £50m dowry to buyer OpCapita to offload its ailing electricals chain.

Buried deep in the terms and conditions of the contract is a laughable clause that prevents Kesa from returning to the UK consumer electronics market in the near future. It would be mad to attempt a comeback. High street consumer electronics is a mug’s game.

It would be wrong to blame the economy. In some senses, the consumer electronics sector is weathering the storm with more resilience than others: just look at Apple.

And last month, BSkyB reported that 771,000 of its subscribers had upgraded to its high definition (HD) services in the last year. It’s fair to assume that a significant proportion of those customers had to buy a new HD-ready TV, but most of them didn’t go to Comet (or Dixons, BestBuy and Argos for that matter).

Instead they turned to internet retailers such as Amazon, where consumer electronics items increasingly dominate the best-seller lists.

Now that two giants – BestBuy and Kesa – have exited the UK in the space of just one week, shares in Dixons (which initially spiked yesterday) are back in focus.

Any fillip will be fleeting. A similar reappraisal of HMV’s shares took place following the demise of Woolworths and Zavvi, and look where it has ended up: its shares have lost almost 90 per cent of their value in the last twelve months.

Dixons isn’t the winner. It is the last man standing. And not for long.