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Thousands More Jobs Gone as Comet Turns Off the Lights

Date: Monday 17th December, 2012

Keith Tully

Written by Keith Tully

Comet - formerly one of the UK's most recognised high street retailers - will officially close its doors today meaning thousands more jobs will go just a week before Christmas.

Administrators Deloitte said the electrical goods chain will close its 50 existing stores after they were unable to find a buyer for the company. Over half of the group's original 6,600 workforce have already gone since Deloitte began its processes in early November, and now over 3,000 more jobs will be cut as the Comet lights finally go out.

Deloitte's report on the decline of the 236-branch chain is understood to show the group collapsed under the weight of almost £200m in losses, leaving no chance of most creditors and landlords getting their money back.

It is believed HM Customs & Revenue are on the unsecured creditors list to the sum of £26.1m in VAT and PAYE payments. On top of that, sources close to the administrators said the government has agreed to pay staff £24m of redundancy pay - meaning a total hit of £50m for the government.

The report is also expected to detail attempts to rescue and restructure the flailing Comet business in the past six months, noting that although costs were coming down, sales were declining at a faster pace with many consumers rebuffing the stock clearances in favour of more competitively priced electrical goods online.

Deloitte has divided up over £80m of assets held by Comet between preferential creditors with Hailey Acquisitions Limited (HAL) receiving almost £50m of the £145m they are owed.

Staff will also get £2.1m of holiday and back pay they are owed in full. Trade suppliers, meanwhile, will receive some of what they are owed, under a scheme that means they still own the goods they have supplied if they are not paid for them. About 85% of suppliers have claimed so-called "retention of title", resulting in payments of about £40m from the administrators.

 

Keith Tully

Author
Keith Tully
Partner

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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