Kesa weighs Comet sell-off as sales fall
ELECTRICALS retailer Kesa yesterday admitted that it was weighing up a sale of its Comet business and revealed that it had already received a number of approaches.
The company said there would be a “strategic review” which would take at least three months and look at a range of options for Comet, including disposal.
Stressing that it considered the Comet brand valuable, it ruled out shutting up shop completely despite another poor sales performance.
Sales for the year fell 6.8 per cent – a full-year loss of £8.9m in the 12 months to 30 April, compared with a profit of £11.5m a year previously.
In the final 16 weeks of its financial year, Comet saw like-for-like sales fall 15.2 per cent year-on-year.
That was up against tough comparatives as the World Cup fueled TV sales last year.
Kesa, which also owns the French Darty brand, saw total sales rise by 2.2 per cent while pre-tax profit dived by 22 per cent.
Kesa chairman David Newlands said: “We have had some expressions of interest in Comet.”
He refused to confirm the number of approaches only saying there were “less than ten”.
Analysts are speculating that US electricals giant Best Buy, which already has a foothold in the UK, is a prime candidate.
Best Buy was also tipped to be interested in struggling Dixons, whose results are out today.
Underperforming Comet stores have been earmarked for closure while the product ranges and space allocated to specific goods are being revamped. Newlands said he did not expect Comet to go into profit in the next year but said he would be “disappointed” if it did not return to the black some time after that.
He said that the strategic review of the business had not been triggered by activist shareholder Knight Vinke, who is reportedly in favour of a sale. The company said the UK market was tough as consumers lacked the spending power for so-called big ticket items like washing machines and TVs.
Chief executive Thierry Falque-Pierrotin said the number of customers visiting Comet stores was dropping, but that more were buying online. “Overall we remained ahead of our markets, successfully grew our profitable web sales, improved the results of Darty France and have taken actions to improve our performance at the other businesses,” he said.