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Kesa sales down 4% as Comet continues to struggle


European retailer Kesa Electricals saw like-for-like (LFL) group sales decline four per cent year-on-year during the festive season, with its UK operations seeing the biggest fall in trade.

Its UK based Comet stores saw sales slip significantly during the important Christmas period, down 6.5 per cent in total and dropping 7.3 per cent LFL compared to last year.

LFL sales fell across all of its regions, made up of stores in France, Italy, Turkey and Spain, between November 1st and January 18th but web-generated trade did manage to grow during the period - up 11 per cent against the same period in 2009.

Thierry Falque-Pierrotin, CEO of Kesa, said: “Against a background of increased competitiveness, Darty France and the other established businesses delivered a robust performance, offset by softer trading at Comet and the developing businesses.

“The group gross margin rate was in line with last year, and the benefit of our cross channel sales strategy was further demonstrated by the 11 per cent growth in web generated sales.

“We remain confident in our strategy and committed to our plans to implement the Darty concept in all our markets and we have put in place a number of additional measures to improve revenue and reduce costs.”

Comet’s business continues its decline after posting a €6.4 million (£5.4 million) fall in profits in the group’s first half results published in December.

Overall revenue for Comet during the most recent trading period declined by 6.5 per cent in local currency and by 7.3 per cent on a LFL basis, whilst aggressive promotions meant gross margin declined by 140 base points.

Poor trading in the UK was blamed on the intensity of competition and poor weather during December by Kesa’s management but Senior Retail Analyst at Verdict Research Matt Piner argues that this does not excuse it performing worse than its rivals.

“Comet’s trading between Boxing Day and the new year weekend was actually at a record high, as shoppers evidently did make some purchases they had delayed due to the weather and there was some pull forward to beat the VAT rise,” Piner commented.

“But with trade once again softening post January 4th, Comet is now set to make a loss for its financial year.”

Electricals rivals Dixons recently reported disappointing sales over the festive season but its four per cent year-on-year reduction in UK & Ireland trading was much healthier than Comet’s over the period.

Pinner added: “A clear picture is emerging that the electricals market was one of the biggest losers over Christmas and the beginning of 2011 looks set to be equally challenging.

“Unfortunately for Comet it looks set to be one of the main losers in the poorly performing sector.”

Published on Wednesday 19 January by Editorial Assistant

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