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Unsold Comet sees sales plummet 22%

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Revenues for Kesa Electricals, owner of UK retailer Comet, declined 9.9 per cent on a like-for-like (LFL) basis during its last quarter period, results released today reveal.

Whilst all of its divisions experienced fall in trade in the three months ending July 31st 2011, up-for-sale Comet was by far the worst performance with sales dropping 22.1 per cent LFL.

The electricals retail group says it is still pursuing strategic alternatives for the underperforming operation despite a buyer not being found but has started a turnaround initiative which has seen improvements to Comet’s gross margin of 80 basis points for the quarter.

Thierry Falque-Pierrotin, CEO of Kesa, commented: “The start of the year has been tough against the strong World Cup comparatives of last year and weakening market conditions.

“Nevertheless, the implementation of our strategic actions helped to deliver increased gross margin, further progress on our cross channel web strategy and market share gains in France, Belgium and Turkey.”

Today’s statement suggests that Comet.co.uk showed an “increasingly improved trend” during the quarter but admitted that overall online growth was hindered by an alignment of store and web prices leading to a reduction of ‘click and collect’ transactions.

Comet closed one store during the period and after a successful trial of a new store layout, the format will now be rolled out to 60 outlets across the country.

Kesa admitted in May that it was looking for a buyer of Comet, which reported full-year losses of £9 million during the summer, but the relatively resilient performance of competitors Best Buy and Dixons Retail makes it a less attractive investment.

The biggest part of the Kesa business, Darty in France, experienced a 3.7 per cent LFL dip in revenues during the quarter but it was still outperforming the market.

Falque-Pierrotin added: “We will continue to implement our strategy of growing a cross channel, service led, specialist model, adapting our plans to meet an increasingly challenging market environment, while maintaining focus on the strength of our cash generation and balance sheet.”

Published on Thursday 15 September by Editorial Assistant

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