Retailer Comet hit by sales slump

The owner of British electrical retailer Comet said the high street chain would slump to a first half loss this year after sales of white goods dived.

The owner of British electrical retailer Comet said the high street chain would slump to a first half loss this year after sales of white goods dived.

Kesa Electricals said Comet's like-for-like sales fell 9.9% during the three months to July 31, with "particularly weak" sales of household electrical appliances. The sales slump compared to a 0.4% rise during the three months to April 30.

Chief executive Jean-Noel Labroue said: "As a consequence, we now anticipate Comet will make a loss in the first half."

Kesa shares slid more than 10% following the update.

Comet, which has 251 UK stores, makes up nearly 40% of Kesa's total sales.

Mr Labroue said: "This quarter has, as anticipated, been very tough.

"Trading conditions across all our markets deteriorated, particularly in the UK, and have not changed since the period end."

He warned earlier this year of slower sales of goods such as fridges, freezers and washing machines, the market for which has been hit by the wider housing market slowdown.

The group also owns French homeware giant Darty, which saw like-for-like sales fall 4.7% during the last quarter. This compared to 5.6% sales growth during the three months to April 30. Darty accounts for 45% of group sales.

Kesa's overall like-for-like sales fell 4.7% during the quarter to July 31.

Mr Labroue said he had put in a "robust plan" to protect margins, adjust costs and generate cash.

Retail analyst Philip Dorgan, from Panmure Gordon, described the sales as "dreadful".

He said: "Like-for-like sales declines of 9.9% at Comet and 3.2% at Darty are below expectations. There also seems to be a profit warning here, though it isn't spelt out."

The performance at Kesa's other businesses in Italy, Switzerland, Turkey and Spain was better than its UK and French core operations. Like-for-like sales across the territories were 1.7% ahead.

Kesa's rival DSG International, which owns PC World and Currys, is also suffering from the consumer spending downturn. Last week the group said sales slid 7% on a comparable basis during the 16 weeks to August 23.

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