Kesa pays £50m to drop Comet
November 9, 2011
Anglo-French electrical goods retailer Kesa has sold the UK-based Comet stores to a private equity firm for just £2 and will hand over a dowry of £50 million and keep the liability of the existing pension scheme.
The buyer is a group of companies under the name “Hailey” advised by retailer turnaround specialists OpCapita. Kesa said it would benefit from any subsequent onward sale of the chain if the resale price were greater than £70 million.
The investment vehicle has also attracted £30 million of outside private equity investment and a £40 million loan facility. Responsibility for warranties and servicing will remain with Comet, but a £62 million fund to support these will be transferred by Kesa to the UK company.
The buyers have promised to keep Comet as a going concern for at least 18 months.
Revenues at the loss-making Comet electrical stores fell 22 per cent over the summer, prompting Kesa’s chief executive to say that a decision would be made by Christmas about whether to dispose of Comet. The sale is expected to involve the closure of some of Comet’s 250 stores.
The news follows the closure of European Best Buy stores by Carphone Warehouse earlier this week.