Jobs at risk as struggling Comet seeks to go into administration

It is being widely reported that Comet, which has outlets across Bedfordshire, Hertfordshire and Buckinghamshire, has applied to the High Court to enter administration next week (November 5).

John Hannett, general secretary of the shopworkers’ union Usdaw said: “This is disastrous news for Comet’s 6,500 employees and more grim news for the UK High Street and economy. We urge any administrators appointed to keep stores trading for as long as possible to enable a buyer or buyers to be found.

“While every failure in the retail sector has its own specific causes, there can be no doubt that the continuing squeeze on people’s incomes caused by the government’s reckless austerity policies lies behind much of the sectors’ current difficulties.

“Usdaw members employed by Comet should contact their local union office as soon as possible.”

Industry watcher Dan Wagner, chief executive and chairman of internet and mobile strategist Powa Technologies, urged companies to get their act together to ensure survival.

Mr Wagner said: “For a store of its stature, Comet was relatively late to the party with regard to online retail, and as it result spent much of its time playing catch-up. The consumer electronics market has been particularly competitive of late, and those who have invested heavily in a multi-channel strategy have reaped the rewards.

“Regardless of size, companies can no longer merely pay lip service to online and mobile commerce, particularly because a greater number of transactions are taking place through these channels. And with the growth in popularity of tablet devices, this will increasingly be the case. The potential demise of Comet is indeed sad news for Britain’s high streets. A keener eye on online shopping would have helped Comet to maintain its favourable position in the marketplace.”

Comet was bought by OpCapita for just £2 ion February this year with the new boss, John Clare, saying he would take the struggling chain back to its 1980s roots, believing that low prices hold the key to success.

Philip Duffy, partner at global financial advisory and investment banking firm, Duff & Phelps, said a slowing down of retailers entering adminstration was good news for the traditional high street.

Mr Duffy said: “Despite the recent spate of high profile high street closures and the swathe of empty shop fronts appearing across UK high streets, retailers have been taking heed of the emerging breed of consumer and are adapting accordingly – understanding that today’s consumer has increased the pace of online shopping from the desktop to mobile devices. For ease, consumers are using technology at hand to research the best deals available without hitting the high street.”

But he added that we should expect more shop closures as internet retailing continues to grow.

“The trend of shop closures may be in part driven by cost, but more so by online clicks. And we would expect to see larger retailers scaling down their property portfolio and focusing more on their digital offering to ensure consumer loyalty going forward,” said Mr Duffy.

> Why do you think Comet is struggling? Is high street retailing doomed in the face of the growth of online and mobile shopping? Register here and leave your comments.