Future of Ravenside store hangs in balance

Staff at Comet in Ravenside must wait to hear what the future holds following the collapse of the electrical goods giant.

The retailer, which has 236 stores nationwide, is now in the hands of the receiver which means thousands of jobs across Britain are at risk.

The news came as a shock for both employees and customers as the appointed administrator Deloitte begins the process to find a suitable buyer to take over the entire chain, or part of it.

For the time being a spokesman from Deloitte told the Observer that the stores are open and trading as usual and that staff are being paid “as normal”.

The crisis has arisen because Comet has been “hit hard by the uncertain economic environment, slow consumer spending and lack of consumer confidence.”

The electrical retail business saw fewer customers buying major items and fewer first time property owners who provided an important market.

Deloitte says weak sales and speculation meant suppliers were reluctant to provide credit terms which had negative effect on cash flow.

Its inability to obtain supplier credit for the peak Christmas trading period meant Comet had no option but to seek administration.

Neville Kahn, Deloitte’s joint administrator, commented: “Comet has been battling the changing landscape of the electrical retail sector for many years.

“It has become increasingly difficult for it to compete with online retailers which don’t face the same overheads such as store rents and business rates.

“Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs.

“In the meantime, all stores will continue to trade and all employees will continue to be paid.

“We appreciate the cooperation and support from the management, staff, customers, landlords and suppliers at what is clearly a very difficult time.”

Extended warranties previously purchased are unaffected and remain valid, added Mr Kahn.