Comet to make 'small loss'

More miserable news from the high street

By Tim Richardson • Get more from this author

Posted in Financial News, 25th May 2005 15:34 GMT

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There was more depressing news from the high street today as Kesa Electricals - Europe's third largest electrical retailing group - reported that its Comet chain is expected to make a small loss for the first half of the year.

Sales for the three months to the end of April at UK-based Comet dipped 1.6 per cent to £316.7m with like-for-like sales slipping 2.2 per cent.

While the sale of digital products such as cameras was "good", a slowdown in consumer spending hit white goods such as fridges and washing machines as soft trading at the start of the year continued throughout the quarter before going further down hill in April.

"As a result of the difficult market conditions and after taking actions to manage margins and implement cost savings, we now expect Comet to make a small loss in the first half," said the company in a trading update today.

Said Kesa chief exec Jean-Noel Labroue: "Comet's performance in the first quarter reflects the difficult market conditions in the UK. The company has already reduced its cost base and will take further action if these conditions persist."

Earlier this month high street rival Dixons reported that it too has been hit by weaker consumer spending, warning of tough times ahead.

In the six months to the end of April, like-for-like sales in the UK - with stores including Currys, Dixons, PC World and The Link - fell two per cent. Demand for gear such as flat screen TVs helped increase sales at Currys and Dixons, but this growth was undermined by a slide in sales at PC World (by eight per cent) and The Link (by nine per cent) over the same period. ®