Comet retail profit falls 76.5% but still better than expected

Jun 25 2009 by Iain Laing, The Journal

RETAILER Kesa Electricals has plunged to an annual loss and revealed a dramatic fall in profits at its UK chain Comet.

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

Comet suffered a fall in retail profit of 76.5% to £10.1m as consumers slashed spending on big ticket and electrical goods in the recession.

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

Kesa forecast “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.