Kesa cuts as Comet struggles

Electricals retailer Kesa yesterday posted a further plunge in sales at its loss-making Comet unit in the UK and said it would accelerate change at the chain in an attempt to revive its fortunes. Kesa, the subject of private equity bid speculation amid stake-building by activist investor Knight, said it would meet market expectations for 2010-11 profit, reduced after a January profit warning. It confirmed that costs would be cut. Kesa blamed weak consumer demand for Comet's woes particularly following January's increase in VAT sales tax, and said it was planning for the unit's like-for-like sales to be negative in 2011-12. “The UK is the toughest market, in my view, in Europe as we speak. Not only in terms of macro environment... but also in terms of electrical retail,” Kesa said.