Comet sheds 450 jobs in biz survival struggle
In-house repairs going out
Laid-up retailer Comet plans to axe 450 engineering and support workers, slashing costs and safeguarding "the long-term viability of the business", it said.
The firm was finally sold a week ago to private equity house Op Capita for £2 with former parent Kesa Electricals also coughing £63m for a dowry, some £13m more than was agreed in November when a deal was initially struck.
As part of a "wider strategic review" of operations, Comet has entered into consultation with workers deemed at risk of redundancy - namely electrical field engineers and roughly one third of 414 employees at a call centre in Bristol.
Currently, Comet provides an in-house UK-wide repair service for electrical suppliers but plans to reduce investment in this area to "focus resources more single-mindedly on store operations", the company said.
There are 248 stores in the UK employing 10,000 staff.
Comet chief executive Bob Darke said: "The proposal to reduce our staff numbers has been a very tough decision to make but significant savings are required to secure the long-term viability of our business."
The retailer, put up for sale in the summer as losses mounted and sales collapsed, was handed a lifeline by Op Capita. The VC last week brought in former Dixons bigwig John Clare as chairman to help turn around operations.
According to Op Capita, retail analysts are forecasting operational losses of £35m for Comet in the fiscal year ending 30 April 2012 after sales dropped at twice the rate of rivals Dixons and Argos over the peak Christmas trading period.
This has led to trade credit insurers reducing lines for the retailer, and Clare said his first task is to convince them to "reinstate" cover, acknowledging that some will not trade without insurance.
A spokesman at Comet told The Reg that the dowry from Kesa had increased to £63m as the "balance sheet was in a slightly different shape to November". ®
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