Owner of Comet chain reports £81m loss

| June 24, 2009
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Kesa Electricals, the company that owns Comet, is predicting a challenging year ahead after the group reported a pre-tax loss of £81.8 million in the year to April, compared with a pre-tax profit of £128.8 million the previous year.

The company, which also owns the Darty business in France, has been hit by the recession as consumers cut back on big ticket items deemed non-essential.

The group, which has a workforce of 26,000 and operates in a dozen countries, did however note that its Dutch, Belgian and Czech divisions had all maintained their market positions and gross margins had improved. It also highlighted that its new operations in Italy and Turkey were making progress.

As a result of the loss, Kesa said it taking action to slash costs – particularly at the Comet chain. Comet, which has 250 stores in the UK, suffered a fall of 7.7% in like-for-like sales to £1.7 billion, with profits falling 76% to £10 million.

As well as weaker trading, profit was hit by £150.9 million of exceptional costs, primarily due to a write-down of £118.5 million in the value of its Spanish division, Menaje del Hogars.

The group’s chief executive, Thierry Falque-Pierrotin, said he is expecting another challenging year but added that he was confident the company would emerge from the recession stronger than it went into it.

Mr Falque-Pierrotin said the group will press ahead with its cost management actions, which has resulted in the loss of 100 jobs in its Comet stores and a further 200 at its head office.

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