Having failed to make the company profitable following a major rebranding exercise in September 2010, Comet owner Kesa Electricals plc has decided to sell the company to Hailey Holdings and Hailey Acquisitions, who are backed by private equity company OpCapita.
Speaking about the reasons behind the sale, David Newlands, chairman of Kesa Electricals, said: "While good progress has been made against the turnaround plan's strategic objectives, in reaching the 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 acceptable level of profitability at Comet over the long term given the specific nature of the UK market, and the substantial costs involved if the turnaround proved to be unsuccessful."
Founded in 1993, there are currently 248 Comet stores across the UK that employ 10,000 members of staff. Despite rebranding last year, which included the launch of a new logo, revenue fell by 7.6 per cent (in Euros) for the period 1 May 2011 to 31 October 2011. A detailed financial report is due on December 7th.
According to the press release, the deal still has be agreed by the shareholders. "The sale is subject to approval of the disposal by the Company's ordinary shareholders (the "Ordinary Shareholders"). In addition, there will be an investment by the Group of £50 million into Hailey 2 LP ("Holdco" the shareholder of the Purchasers). The Company will retain the liability for the Comet Defined Benefit Pension Scheme."
Though the future of the electrical retailer is now uncertain, the new owners plan to continue operating Comet stores for at least another 18 months.
The downturn in fortune for Comet follows the news that 11 Best Buy stores in the UK are to close down due to profits plummeting over the past couple of years.
