Falling Comet: Kesa's profits down more than 75 per cent

By DAILY MAIL REPORTER
Updated:

Comet owner Kesa Electricals today plunged to an annual loss as it revealed a dramatic fall in profits at its UK chain.

The group, which also owns Darty in France and trades across Europe, posted a pre-tax loss of £81.8million in the 12 months to April 30, compared to a profit of £128.8million in the previous year.

Its UK chain Comet saw retail profit fall by 76.5 per cent to £10.1million amid falling sales as consumers slashed spending on 'big ticket' and electrical goods in the recession.

The group's results were affected by write-offs relating to its struggling Spanish business Menaje del Hogar of £118.5million. It also saw restructuring costs of £23.1million relating to the Spanish chain and Comet.

The owner of UK retail giant Comet has recorded an annual pre-tax loss of £81.8million

The owner of UK retail giant Comet has recorded an annual pre-tax loss of £81.8million

Kesa warned of 'another difficult year' ahead and said it planned to continue its cost saving drive and efforts to mitigate losses.

Chief executive Thierry Falque-Pierrotin said: 'Trading conditions across all our markets were difficult throughout the year.

'Actions have been taken on costs across the group, and particularly in the UK, to mitigate the impact of the market conditions.'

Kesa's business has been hurt by the consumer spending slowdown, especially in the UK and Spain.

It has previously said that Comet's like-for-like sales dropped 7.7 per cent in the year as shoppers shied away from big purchases.

The group's efficiency drive is thought to have affected 300 jobs at the Hertfordshire-based Comet. It said it had closed four service centres and reorganised its logistics structure in the period.

Kesa also plans to close one regional distribution centre in the first half of this year.
The Comet restructuring accounted for £9.6million of exceptional costs, but Kesa hopes it will produce annual savings of around £14million.

Further investments in its online offering included product advice videos and customers reviews and the group said web sales now accounted for 12 per cent of Comet's total revenue.

Meanwhile, Kesa said while most of its businesses had maintained their market positions or started to grow, it had encountered 'extremely weak' conditions in Spain, which it described as 'much worse than anticipated'.

Jobs are being cut across Kesa's Spanish operation as it closed warehouses and reduced head office staff. It also plans to shut 20 stores.

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