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Comet Group

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Comet Group Limited
Company typeElectrical retailer
IndustryRetail
Founded1933
FounderGeorge Hollingberry in Kingston upon Hull, East Riding of Yorkshire
HeadquartersRickmansworth, United Kingdom
Number of locations
243 stores in United Kingdom
Area served
United Kingdom
Key people
Henry Jackson (CEO of OpCapita)
Bob Darke (MD)
Carl Cowling (COO)
John Clare
ProductsWhite Goods, Telecommunications, Information technology, Home Entertainment
RevenueDecrease -6.5%
OwnerOpCapita
Number of employees
8,000
Websitecomet.co.uk

Comet Group is an electrical retail chain trading in the United Kingdom, owned by OpCapita LLP.[1] The company sells Consumer Electronics and White goods along with related products and services.

The group was founded in 1933 by George Hollingberry in Hull as Comet Battery Stores Limited. Comet demerged from the Kingfisher plc retail conglomerate in 2003 to form a new group under the Kingfisher Electricals SA (Kesa) umbrella. On 18 August 2005, Comet embarked on a £20 million rebranding campaign to differentiate itself from other players in the market, mainly Currys, as both company logos were in white print against a red background.

Comet operates a policy called Every Day Low Pricing, meaning it checks competitors' prices and, where lower prices are found, it reduces its own to match. Like many retailers Comet backs this up with a 'price promise'. This states that if a customer finds the same product on sale at another retailer locally (within 10 miles) for less, Comet will match this price. The product needs to be exactly the same model, sealed new, in stock from the other retailer within 10 miles of the purchase store, and verifiable. Comet does not match internet retailers or warehouse outlets such as Makro. The price promise can be used at the time of purchase or at any time within the first 14 days after purchase.

Store types

Comet adjacent to their main competitor Currys, in Guiseley, West Yorkshire.
A Comet in Leeds, carrying the old logo.

Comet has 243 stores in the UK in three different layouts. The high street style store contains large display cases stocking mainly small domestic appliances such as grey and brown goods with others in warehouses and few items available for self select. The core store stocks a larger range of goods to include white goods. Some items are self select; other larger items are kept in a warehouse. The 'destination' store, stocks nearly the whole range that Comet sells, many items are self select except for very large and delivery only items. These stores will also stock many of what Comet calls the 'premier collection'. These are products by well-known brands such as Panasonic, Pioneer, Apple, Sony, Samsung, Philips, AEG and Miele. Comet also sells own-brand products covering most categories of small electricals under the name ProLine.

Kesa Electricals unveiled plans for 40 two-storey Comet outlets with mezzanine levels in 2007. Kesa, which had launched a combined television, phone and internet service at its French chain Darty, ruled out bringing a similar service to the UK. Hugh Harvey, Comet's managing director, said the UK chain would "stick to a traditional retail offer while we watch Mr Murdoch and Mr Branson fight it out." In France, 28,000 subscribers had signed up to DartyBox by the end of January 2007 with a further 140,000 more subscribers by the end of 2007.[2]

Slogan

Comet's slogan old phrase was "We live electricals". The 'mascot' was a small man wearing a helmet with a comet on it and riding a scooter. Edith Bowman was the voice of the television and radio adverts for Comet since 2005. The company had a new series of TV adverts, with a new slogan; "We deal in your ideal". The adverts see the old animated style dropped for live action film, but retain the voice of Edith Bowman, as well as the old slogan in as part of the logo.

On 15 September 2010 a new logo was launched, similar to that of the previous but slightly softer with the Comet wordmark in lowercase and with a new strap line of 'Come and Play'. The new branding is focusing on more of a fun and friendly approach to its customers, appealing to many different target audiences to come into store and try out some of the interactive displays such as 3D TV. There are 4 new TV adverts too, with Comet employees building one big technical visual appliance from lots of smaller ones.

Criticism

Comet regularly comes under fire for poor customer service issues[3] and inadequately trained sales staff.[4] Complaints about Comet's refusal to refund faulty products have led to investigation by Trading Standards.[5] Comet price promise states, "There are a couple of exceptions. We won't try to match the price of internet or mail order companies with no stores. Nor do we match against warehouse or mail order clubs or voucher promotions, either online or in-store."

In addition, in January 2012, Microsoft accused Comet of bundling 94,000 copies of Windows XP and Vista recovery discs. Comet have replied saying they have done so out of the best interest of their customers. The full article was reported by Swogo on Tech.

Distribution

Comet outsources its distribution operations to Wincanton plc. The company has recently invested millions of pounds moving its southern Regional Distribution Centre (RDC) from River Way in Harlow to a state-of-the-art warehouse on Edinburgh Way, Harlow. In addition to its 'New Harlow' RDC, it has a further RDC in Skelmersdale.[6]

Financial results

Year 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
Sales £M 1,205.8 1,335.6 1,406.1 1,444.4 1,538.1 1,530 1,676.5 1,731.6 1,659.6 1,650.2 1,537.9
Retail Profit/(Loss) £M 33.1 38.4 43.3 47.4 52.0 38.0 46.1 44.2 10.1 11.5 (8.9)

This data is sourced from the Comet Group website

Comet delivered record trading from Boxing Day 2010 through to the New Year weekend, but this strong performance failed to offset the weaker sales seen early in December due to competitive trading and adverse weather conditions. Overall revenue for the period declined by 6.5 per cent in local currency and by 7.3 per cent on a like-for-like basis. Gross margin declined by c.140bit/s reflecting the highly promotional nature of the market over the period. Web-generated sales grew by only 3 per cent, reflecting some disruption during the introduction of the new software platform by Comet in November 2010. Since the introduction of the VAT increase on 4 January Comet has so far seen sales trends soften. In the light of these factors Comet is now anticipating the company will deliver a small retail loss for the year.[7]

High Street

The High Street Comet on Briggate in Leeds.

Comet tested the idea of high street stores in Manchester and Leeds in an attempt to compete with Currys Digital.

The Leeds Briggate store was closed three months after opening due to the store premises, which were spread over two storeys, being unsuitable for disabled access. The store was deemed a success and Comet is currently searching for another site in the area which would be more suitable for all customers.

The store in Manchester located in the Arndale Centre remained open after the trial period, however it closed on 17 January 2011.

Sale to OpCapita

On Wednesday 9 November 2011, it was announced that Comet had been sold to investment firm OpCapita for £2 with a £50 million sweetener. OpCapita will invest £30 million and raise additional financing of £40 million. Its focus is to improve the business operationally as it says it has done in previous investments.

Kesa retains responsibility for the Comet pension scheme, as part of the deal, which has a £39 million (€45 million) deficit. They will invest £50 million into the new entity, but chairman David Newlands said it would be wrong to predict a great return: "The £50m is categorised as an investment. We had to pay £50m to get the business away. We will write it off as having no value. Kesa will only get a return on its £50m 'investment' if Comet is sold on for more than £70m."[8] On 10 February 2012 OpCapita announced that it will be closing down Comet's in-house repair service, with the loss of 450 jobs and outsourcing this function to third parties. The company said that the move would allow it to focus resources more single-mindedly on store operations.[9]

Competitors

See also

References

  1. ^ Financial Times, 4 February 2012
  2. ^ "Kesa plans 40 two-storey Comet outlets". The Independent. 22 March 2007. Retrieved 30 December 2007. [dead link]
  3. ^ Ciao Comet Reviews
  4. ^ Dooyoo Comet review Dooyoo
  5. ^ Don't buy from Comet Platinax
  6. ^ "Job loss fear at DHL logistics firm in Corby". BBC. 19 April 2011. Retrieved 8 September 2012.
  7. ^ Third Quarter Interim Management Statement - January 2011 by Kesa Electricals
  8. ^ Hawkes, Alex (9 November 2011). "Comet sold for £2 and new owners get £50m sweetener". The Guardian. Retrieved 9 November 2011.
  9. ^ Leroux, Marcus (11 February 2012). "Repairs desk closes and 450 jobs go". The Times, London.

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