New Comet owner looks to protect jobs and stores

OpCapita has no plans for redundancies or 'significant' store closures following purchase of embattled retailer for £2

The buyout of Comet by private equity outfit OpCapita will save most of the high street giant's UK stores and jobs.

Anglo-French retailer Kesa Electricals confirmed what the market has been speculating for weeks by selling off Comet for the princely sum of £2 to companies named as Hailey Holdings and Hailey Acquisitions. Both are vehicles for private equity house OpCapita.

Kesa is also investing £50m as a parting gift to help ensure that Comet continues to trade as a going concern for the next 18 months. OpCapita is providing £30m of backing, and there is also a £40m asset-backed lending facility for the ailing tech retailer to make use of.

Kesa will make money back should Comet be sold on again for more than £70m, but the company has indicated it has accepted the £50m as a write-off for getting shot of the UK chain.

OpCapita plans to take cost out of the business, but has indicated that no redundancies are currently planned, nor will there be a "significant store closure programme", reports The Guardian.

Comet has been on the market since June, when its parent announced it was looking at strategic options to reverse the business' fortunes or offload it to someone that could.

David Newlands, chairman of Kesa Electricals, said: "The board believes that a disposal on the terms agreed with the purchasers is in the best interests of ordinary shareholders and delivers a more certain outcome than continuing with the turnaround plan.

"Whilst good progress has been made against the turnaround plan's strategic objectives, in reaching its view the board took into account the ongoing negative impact of Comet on the financial position of the group; the significant challenge involved in achieving an acceptable level of profitability at Comet over the long term given the specific competitive nature of the UK market; and the substantial costs involved if the turnaround plan proved to be unsuccessful."

Kesa's first-half trading update, issued today, illustrates the negative impact Comet was having on its books. For the six-month period to the end of October, total group revenue fell 6.2 per cent when measured in local currencies. Its flagship Darty France brand suffered a slip of two per cent, while operations in the Benelux region grew sales by 0.7 per cent.

But H1 turnover at Comet fell 17.9 per cent in local currency, adjusted to 21 per cent when measured in euros.