NEWS
01/11/2012 07:36 GMT

Comet Collapses Into Administration Ahead Of Crucial Christmas Period

Comet, the electrical retailer, has told staff it will go into administration after a year-long rescue attempt by OpCapita failed.

Staff were informed of the decision on Thursday, according to a report in Retail Week. Chief executive Bob Darke told staff it will file an intention to appoint an administrator with a view to entering administration in the week beginning 5 November.

Private equity firm OpCapita bought Comet for just £2 in February 2011, including taking on its substantial pension liabilities.

It had been hoped that OpCapita would be able to find a buyer for the chain, which employs 6,000 people, but a cash crunch in the run up to its crucial peak Christmas trading season, has led to OpCapita to call in Deloitte.

Comet was also reportedly trading without credit insurance, which protects suppliers if their customer collapses, according to a report in the Financial Times.

It now remains to be seen if OpCapita and its administrator Deloitte will be able to salvage any of the business.

Comet was founded in 1933 as a business charging batteries for wireless sets. It opened its first store in 1968, in Hull, and was bought by Kingfisher in 1984, which expanded the Comet brand into one of the most familiar names on the High Street.

2012 has been a terrible year for the British high street; JJB Sports went into administration in October 2012, with the loss of 2,000 jobs, and Clinton Cards, Game Group, Blacks Leisure and Peacocks all collapsed earlier in the year.

Although all of the brands were salvaged in some form, hundreds of stores closed and thousands of jobs were lost.

Bed retailer Dreams could be one of the next big names to fall into trouble - is currently in the middle of negotiations with its lender, the Royal Bank of Scotland, over securing future funding.

And on 1 November, Dreams confirmed the departure of its chairman Steve Johnson, as reported on InsolvencyNews.com.

A spokesman for Dreams told InsolvencyNews.com that Johnson's departure was "his decision" and that the business "continues to trade well and we remain in on-going discussions with our lenders”.