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Comet LFL sales slump 15.2%

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UK electricals retailer Comet saw like-for-like (LFL) sales plummet 15.2 per cent year-on-year between January 9th and April 30th 2011, according to today’s end-of-year trading statement from parent company Kesa Electricals.

For the whole 12-month period to April 30th LFLs were down 7.7 per cent, reflecting the effect falling consumer confidence has had on the selling of big ticket items as well as the crowded marketplace in which Comet operates in.

Even online sales have struggled, falling eight per cent year-on-year in the latest trading period.

Kesa acknowledged today that market conditions in the UK “remained particularly tough” and revealed that it is undertaking restructuring actions at Comet, as well as at its Dutch business BCC and Darty Spain.

Darty France remains the star performer for Kesa, with LFL sales up five per cent in the latest four months of trading and two per cent for the overall year - both of which are comparisons with the equivalent periods one year before.

Group LFLs for the year were down 1.8 per cent compared to 2009/10, with Comet significantly holding back the business’s growth.

Plans are now in place for Comet to consolidate its 14 regional service centres to just two sites, as well as decrease the warehouse network from three to two. It has also reduced staff numbers at its head office.

Managing Director Hugh Harvey also departed the business last week, and was replaced by Commercial Director Bob Darke.

These measures, in addition to the day-to-day management of its cost base, are expected to help Comet reduce costs by an expected £10 million on an annualised basis and enhance customer service levels.

Although aware of the challenges facing Comet and Kesa Electricals as a whole, Group CEO Thierry Falque-Pierrotin is confident about the year ahead.

“In market conditions that have remained challenging, we have demonstrated the strength of the Darty concept with strong performances and overall market share gains at Darty France and the other established businesses together with the improvement of our positions in the developing businesses,” he explained.

“In the UK, market conditions remained particularly tough and we have accelerated our plans at Comet to reposition the business and reduce our cost base.

“Supported by improved market positions in most of our markets, further cost measures in all countries with specific restructuring at Comet, BCC and Darty Spain and the strength of our balance sheet, we are well prepared for the challenging markets we expect to face in the coming year.”

Published on Wednesday 11 May by Editorial Assistant

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