Ailing electrical retailer Comet reopened today while administrators search for a buyer but customers hoping to use vouchers are being told they have been temporarily suspended.
Deloitte is seeking a buyer for the British electrical maker, one of the largest high street casualties since Woolworths in 2008. Comet employs 6,500 staff in about 240 stores across the UK and the administrator was appointed on Friday to launch an “urgent” search.
Administration is a legal move which provides companies with breathing space to discuss any possible survival plan with their nominated administrator.
But, as a result of the move: “Gift vouchers have been suspended temporarily while they assess the situation,” a Deloitte spokesman said. Media, including consumer magazine Which, were advising customers to use their vouchers last week before the company went into administration. It is unclear how many vouchers remain unused or their total value.
“Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs,” Deloitte’s Neville Kahn, joint administrator and restructuring services partner, said in a statement.
Other British retailers have also fallen into administration this year, including Clinton Cards, Game Group, Peacocks and Aquascutum, as the double-dip recession took its toll.
Deloitte said Comet had been hit by weak high street trading conditions and competition from Internet retailers. Investment firm OpCapita bought the chain in February.
Comet, which analysts estimate has a 6 per cent UK market share, was acquired by OpCapita for a nominal £2 from Darty (then known as Kesa Electricals) in February, with Darty paying OpCapita £50m to take the business off its hands.
Comet ran into trouble when suppliers tightened their terms as the firm attempted to reach its peak stock requirement ahead of Christmas. Trading without the credit insurance that protects suppliers meant it had to pay cash up front for goods.
Extended warranties previously purchased remain valid and are not affected by the administration.
Comet’s customer care team is handling any customer inquiries on 0844 8009595.