Comet stores open for final day
- 18 December 2012
- From the section Business
Comet stores are to close their doors for the last time on Tuesday, bringing the failed electrical retailer's 79-year history to an end.
Of the 236 stores the firm presided over when it went into administration last month, only 49 are still open.
On Monday, administrators Deloitte said unsecured creditors would get back less than 1% of the money owed to them.
The chain's collapse will also cost the government £49.4m in redundancy payments and foregone tax revenues.
The redundancy money owed to thousands of former Comet workers totals £23.2m and will be paid by the government's Redundancy Payments Service (RPS).
Meanwhile, £26.2m is owed in taxes to HM Revenue & Customs (HMRC), which is one of dozens of unsecured creditors of the retailer who are owed a total of £233m, none of which will be repaid.
The Insolvency Service has launched a fact finding enquiry to look at the circumstances leading up to the chain's collapse.
A spokeswoman for the Department of Business, Innovation and Skills said it would look at whether further action was required but said: "We are not in a position to comment further at this stage. To do so could prejudice the outcome of the investigation and any future action."
A statement from OpCapita, the private equity firm that set up the company that owned Comet at the time of its collapse, said it would be happy to assist with the enquiry: "We will of course assist fully with any inquiry and welcome the opportunity to provide [the Department for Business and Skills] with factual information relating to the circumstances which led to Comet entering administration.
Other unsecured lenders reportedly include landlords owed £135m in rents and other claims, manufacturers unable to reclaim goods delivered to Comet on credit worth £6m, and various other claimants owed £66m, such as ITV and Google, which had reportedly not been paid for advertising.
The total hole in Comet's balance sheet by the time it was wound up had reached £311m, according to Deloitte's estimations.
Comet's secured lenders will also be stung by the firm's failure, receiving only £50m of the £145m they are owed, as the assets on which their debts were secured could not be sold off at a high enough price.
The company's main secured lender is Hailey, the company set up by OpCapita in order to buy up Comet from Anglo-French retail group Kesa last year for a nominal £1 payment.
However, OpCapita failed to turn around Comet's fortunes, as the company continued to suffer from the fall in UK consumer spending during the recession and the big growth in online rivals.
Deloitte also revealed on Monday that Comet's losses in the year to April totalled £95m, while its revenues slumped by £200m.
In the subsequent five months, Comet lost a further £31m.
Towards the end, insurers refused to guarantee suppliers, who in turn refused to extend credit on sales to Comet in the run-up to the crucial Christmas sales period.
Comet's demise is one of the biggest High Street casualties of recent years.
The 236-store business, which at the time employed about 7,000 people, was founded in Hull in 1933 and began life selling batteries and radios.
The closure of the final Comet stores comes after Deloitte failed to find a buyer for the company.
It is unclear what will become of the Comet brand, with one possibility being a sale to an online retailer, similar to the fate of Woolworths.
Kesa Electricals was renamed Darty in July this year.
Despite having its headquarters in London, it focuses on the continental market - especially France, where it has more than 200 stores under the Darty name.