Business News Deals Retail

Comet sold for £2

By | Published on Wednesday 9 November 2011

Comet

Following the news earlier this week that US consumer electronics giant Best Buy was axing its European expansion ambitions and closing its UK stores, one of its main British rivals – Comet – has just been sold to an equity outfit called Hailey Holdings for £2.

The struggling electronics chain’s current owners, Kesa, will invest £50 million into Hailey Holdings and retain liability for Comet’s pension scheme, on the condition it will get a kick back if the new owners can turn round the retailer’s fortunes and sell it on for more than £70 million. The new owners have committed to keep Comet running as a going concern for at least eighteen months.

Consumer electronic retailers on the high street have been having a difficult time of late, with new competition from the internet and supermarkets coupled with a more general slump in consumer spending. Comet’s new owner presumably hopes that once the economy picks up there will still be opportunities for the big brands in this space.

Of course given Best Buy and Comet’s recent woes in the UK, some will further question whether the strategy of HMV big chief Simon Fox – a former Comet MD – to expand the amount of floor space in his stores dedicated to entertainment-based gadgets is really a long-term solution for his company’s own problems. Though headphones are selling very well, remember.



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