THE FUTURE of Comet is hanging by a thread after the troubled retailer called in administrators yesterday, sending its website crashing and shares in rival electricals retailers soaring.
OpCapita, the private equity firm which acquired Comet for £2 less than a year ago, confirmed it has filed its intention to appoint administrators with the view of going into administration next week.
Filing the notice at the High Court puts in place a moratorium giving the company five working days of breathing space free of creditors to discuss plans for the retailer’s future.
The 80-year old firm, which started as a business charging batteries for wireless sets, employs around 6,000 staff and runs 243 stores across the UK. Its failure would mark one of the largest collapses on the high street since the credit crisis in 2008.
The pre-Christmas rush for stock has put a squeeze on Comet’s finances and the group was forced to call in administrators after it was unable to secure the credit insurance needed to safeguard suppliers.
Shares in rival Dixons closed up more than 13.5 per cent last night while Home Retail Group rose 3.9 per cent on Comet’s demise as investors expect the chain to pick up some of the market share.
“Short term, though, there may be some disruption as administrators discount Comet’s stock to clear,” Freddie George, analyst at Seymour Pierce said.
Sources said the firm is likely to be broken up, with stores sold off to other retailers and liquidators such as GA Europe or Hilco.